Highlander Partners has sold its portfolio company, SensoryEffects, to Balchem Corporation, a publicly-traded human and animal health and wellness company, for $567 million. According to Highlander Partners, the investment in SensoryEffects is the most successful one in the firm’s history.
SensoryEffects is a supplier of customized food and beverage ingredients and products. The company operates through three divisions: (1) SensoryEffects Powder Systems with locations in Ohio, Pennsylvania, Wisconsin and Minnesota; (2) SensoryEffects Flavor Systems located in Bridgeton, MO, and (3) SensoryEffects Cereal Systems located in Lincoln, NE. SensoryEffects is headquartered in St. Louis (www.sensoryeffects.com).
The sale of SensoryEffects to Balchem represents the culmination of eight years of collaboration and enterprise building between Highlander Partners and SensoryEffects’ founder, Chairman and CEO, Charles Nicolais, and the management team he assembled.
In 2005, Highlander decided to partner with SensoryEffects to consolidate and professionalize certain segments of the food ingredient manufacturing industry. SensoryEffects first acquisition in the spring of 2006 was Diehl, a 125 year old family-owned business located in Defiance, OH, with revenues of approximately $15 million. After eight years and twelve additional acquisitions, substantial organic growth, millions of dollars of capital expenditures and investment in human resources, SensoryEffects now has six manufacturing sites that in 2014 are expected to generate revenues of $260 million and EBITDA $53 million.
During the term of ownership, the relationship between SensoryEffects and Highlander Partners was highly collaborative. While the day-to-day running of the business was always in the hands of management, there was constant interaction and communication between senior management and Highlander team members, particularly in the areas of acquisition strategy, tactics and negotiations; new product development projects; management recruiting; budgeting; development of key performance indicators; and overall business philosophy.
Highlander Partners makes investments in middle market businesses in targeted industries in which the principals of the firm have significant operating and investing experience. Sectors of interest include healthcare, basic manufacturing, food, and building materials. The firm has over $600 million in capital under management and is based in Dallas (www.highlander-partners.com).
Balchem Corporation (NASDAQ: BCPC) develops, manufactures, and sells specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, and medical sterilization industries in the United States and internationally. The company operates in three segments: Specialty Products; Food, Pharma & Nutrition; and Animal Nutrition & Health. Balchem is headquartered outside of New York City in New Hampton, NY (www.balchem.com).
© 2014 PEPD • Private Equity’s Leading News Magazine • 5-8-14
