The Edinburgh-based investor, which bought its stake in the business from Lloyds Development Capital (LDC), is pumping £32m into the company as it expands beyond the 50 countries in which it already operates.
The deal marks the second investment for Dunedin’s third buyout fund, which closed in July after raising £300m.
LDC invested in Birmingham-based Kee Safety in 2011, since when its turnover has risen from £27m to £35m and its headcount from 180 to 274 staff.
Nicol Fraser, a partner at Dunedin, will join the firm’s board as part of the deal.
Fraser said: “Kee Safety represents an exciting opportunity for Dunedin to invest in a first-class management team with a track record of delivering into international markets.
“The business enjoys strong brand recognition and loyalty across its global customer base and has successfully utilised this strength to develop the brand.
“The company offers a scalable platform to further exploit international growth opportunities.”
Kee Safety traces its roots back to 1934 when George Gascoigne invented the Kee Klamp barrier system for milking cows.
The tubular fittings are now used to make guard rails and barrier systems on roofs, stairways and other locations.
Chris Milburn, chief executive at Kee Safety, said: “Dunedin was the obvious fit for us. They have a strong partnership approach and a reputation for delivering on what they say they will do.
“They also have a proven track record of enabling businesses to achieve growth organically and through acquisition.
“Further international expansion is a key element of our growth strategy and we are confident that they will help us to realise these ambitions.”
Backing the MBO is the latest in a string of deals for Dunedin. Last December, the investment firm supported the £34.5m MBO of Edinburgh-based Premier Hytemp, which makes parts for the oil and gas industry.
The firm was part of former Rangers Football Club owner Sir David Murray’s metals empire and the MBO was led by one of his key lieutenants, Donald Wilson, who had spent 25 years working with Murray.
In June, Dunedin backed a £43m MBO at York-based Trustmarque Solutions, a technology company that lists the NHS, Royal Bank of Scotland and Sainsbury’s among its clients.
The private equity firm has also completed a raft of sales, selling Shropshire-based dental membership scheme Practice Plan in August to the Wesleyan Assurance Society for a 2.8-times return on its initial investment.
Dunedin completed three exits last year. It sold Etc Venues in November 2012 to Growth Capital Partners, having sold power station IT firm Capula to Netherlands-listed Imtech and military bridge builder WFEL to German defence firm KMW within eight days of each other during May.
Previous investments have included Goals Soccer Centres, Jessops and Letts Filofax.