Audax Private Equity has acquired California Products Corporation, a maker of interior and exterior paints and stains, from Delos Capital which had acquired the company in December 2013. Delos remains a minority investor in California Products.
California Products is a provider of branded architectural interior and exterior paints and stains, tennis court and other sports surfaces coatings systems, and mold and abatement remediation coatings. The company is led by Steven McMenamin, President. California Products was founded in 1926 and is based north of Boston in Andover, MA (www.calprocorp.com).
The buy of California Products gives Audax a second company to add to its specialty products platform which currently includes in Nicoat, a manufacturer of water-based and UV-curable coatings used in graphic art, packaging, and specialty coating applications, which Audax acquired in March 2015 from Caltius Equity Partners. Continuing its private equity lineage, Caltius acquired Nicoat from Prairie Capital which first invested in the company in 2005. Nicoat is based just outside Chicago in Itasca, IL (www.nicoat.com).
Audax plans to operate California Products and Nicoat as standalone businesses but will view them as one specialty products platform. Audax will seek to monetize synergies where it can through combined raw material purchasing, technological collaboration, and shared services. As you would expect, Audax plans to grow the platform through acquisitions in both new and existing end markets, products lines, and technologies as well as through organic growth.
“Our entire organization is excited to partner with Audax and Nicoat in our vision to create a specialty formulated products platform, leveraging Audax’ experience in building companies through acquisition, including within the specialty chemicals sector, with our leading brands, scalable operations, and talented leadership and employees,” said Steven McMenamin, President of California Products.
“We are thrilled to partner with Steven McMenamin and his senior management team who have built California Products into a market leading platform in its core end markets through organic growth and several acquisitions,” said Don Bramley, a Managing Director of Audax Group. “We look forward to working together with him as well as Pete Longo, who served as California Products’ CEO and has now joined the board of the combined platform, to accelerate growth organically and through acquisition and build upon the successes they have achieved.”
The Audax Group makes control investments of $10 million to $100 million in middle market companies with transaction values of $25 million to $500 million. Sectors of interest include industrial manufacturing; energy; outsourced industrial services; consumer products; healthcare devices and services; non-asset based logistics; technology; aerospace & defense; business services; and direct marketing. Audax has over $6 billion in assets under management in its private equity, mezzanine, and senior debt businesses. The firm was founded in 1999 and has offices in Boston, New York, and Menlo Park (www.audaxgroup.com).
Delos Capital, the seller of California Products, invests in lower middle market companies that have EBITDAs of $10 million to $30 million and are active in the chemicals, packaging, industrial, consumer sectors. The firm was founded in 2013 and is based in New York (www.deloscap.com).
“Delos Capital was fortunate to have backed the right company and management team in our fund’s first investment,” said Matt Constantino, Founder of Delos Capital. “Our investment in California Products yielded a great return for our institutional shareholders, and we are excited about our rolled equity going forward.”
Middle-market investment bank Grace Matthews (www.gracematthews.com) was the financial advisor to California Products. The transaction was led by Andy Hinz, a Director at Grace Matthews. Goodwin Proctor was California Products’ legal counsel and Kirkland & Ellis served as legal counsel to Nicoat and Audax.
© 2015 PEPD • Private Equity’s Leading News Magazine • 10-30-15
