Sun Capital Partners has signed an agreement to sell its investment in Emerald Performance Materials, a producer and marketer of specialty chemicals for niche consumer and industrial end-markets, to American Securities. Sun Capital Partners first invested in the company in May 2006. The transaction is expected to close in the third quarter of 2014.
Emerald Performance Materials serves a range of end markets such as flavors & fragrances, food & beverage, personal and household care, composites, structural adhesives, coatings, and flooring, among others. The company’s products enable end users to make goods that perform better through a variety of applications, such as adding color to paint and cosmetics, adding longevity to tires, imparting strength to adhesives and composites, providing scents to perfumes and soaps, and preserving soft drinks. Emerald has seven manufacturing operations and approximately 600 employees. The company is based in Cuyahoga Falls, OH (www.emeraldmaterials.com).
Emerald was created from the divestiture of six separate chemicals businesses by a corporate parent. Since the acquisition by Sun Capital, a standalone infrastructure was put in place and manufacturing assets were reconfigured to optimize production capacity and focus on higher margin products. These efforts enabled Emerald to extend its product breadth and geographic reach through both organic growth and a series of strategic add-on acquisitions including CVC Specialty Chemicals and DSM Special Products.
Significant investments in new plant equipment have enabled the company to expand capacity at its Rotterdam and Kalama, WA sites in order to meet increased customer demand. Refocusing on higher margin specialty products and a commitment to investment in research and development has led to an expanded product offering with more than 50 new products added to Emerald’s portfolio in recent years.
As a result of these efforts, Emerald has seen a dramatic improvement in profitability, achieving more than a three-fold increase in EBITDA while owned by a Sun Capital. Notably, the company’s EBITDA growth was uninterrupted by the global economic recession of late 2008 and early 2009, despite the challenging market conditions.
“We’re extremely proud that by applying our deep experience in building corporate carve-outs into market leaders, Emerald has transformed into one of the top performers in the industry,” said Marc Leder, Co-CEO at Sun Capital. “After completing a series of strategic acquisitions, making significant investments in new equipment, and expanding the company’s high-margin product portfolio, we’re confident Emerald is poised for continued success under its new owner.”
Sun Capital Partners is focused on leveraged buyouts, equity, debt, and other investments in companies that can benefit from its in-house operating professionals and experience. Sun Capital has invested in and managed more than 335 companies worldwide with combined sales in excess of $45 billion since the firm’s inception in 1995. Sun Capital has offices in Boca Raton, Los Angeles, and New York as well as affiliates with offices in London, Paris, Frankfurt, Luxembourg, Shanghai and Shenzhen (www.SunCapPart.com).
The sale of Emerald Performance Materials marks Sun Capital’s fifth exit of 2014. Last year the firm completed eight exits and two IPOs, leading to more than $1 billion in realizations for 2013 — a record for the firm.
2014 PEPD • Private Equity’s Leading News Magazine • 6-5-14