Arsenal Capital Partners has acquired Kel-Tech, a provider of specialty oilfield chemicals to companies operating in the Permian basin. The investment in Kel-Tech follows Arsenal’s December 2013 acquisition of Flowchem, a specialty chemical provider to the pipeline industry.
Kel-Tech provides specialty chemicals and related services to production, field stimulation and drilling operations in the oil & gas market. The company was founded in 1983 and headquartered in Midland, TX (www.keltechinc.com).
“Kel-Tech is a leading supplier of solutions to the oil and gas sector, specifically in the growing Permian basin. We look forward to working with Frankie Keller and his team to support Kel-Tech’s existing customer base and growing the business geographically, through strategic add-on acquisitions,” said Tim Zappala, a Partner who co-heads Arsenal’s Specialty Industrials practice.
Arsenal Capital Partners invests in middle-market specialty industrial and healthcare companies that have $50 million to $250 million in enterprise value. Industries of specific interest include specialty & fine chemicals; segments of healthcare; transportation and logistics; power generation; aerospace & defense; and process industry components and services. Arsenal has $1.7 billion of committed capital under management. The firm was founded in 2000 and has offices in New York and Shanghai (www.arsenalcapital.com).
“The Kel-tech deal builds on Arsenal’s exposure to the oil and gas market after our recent acquisition of Flowchem. We see the Permian region as a leading source of growth in U.S. oil production and the company’s services will be crucial to support this trend,” said Shawn Abrams, an Operating Partner in Arsenal’s Specialty Industrials practice.
KeyBanc Capital Markets and Madison Capital Funding provided senior debt financing, and funds managed by Sankaty Advisors and Metropolitan Life provided subordinated debt financing for the transaction.
Houston-based investment bank PPHB (www.pphb.com) acted as financial advisor to Kel-Tech. Midland-based Syntal Capital Partners (www.syntalcapitalpartners.com) advised the Keller family.
“We are excited to partner with Arsenal as we enter this new stage for our business. It was important for us to team up with a strong partner as the company continues to support the growing needs of our long-standing customer base in the Permian Basin. Their operational expertise and successful track record in the chemicals and materials sector will be a valuable asset as we continue to strengthen Kel-Tech,” said Frankie Keller, founder and CEO of Kel-Tech.
© 2014 PEPD • Private Equity’s Leading News Magazine • 3-10-14
