Archives for October 2016

Arsenal Sells Kel-Tech to Clariant

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Arsenal Capital Partners has completed the sale of its portfolio company Kel-Tech to Clariant Corporation. Arsenal acquired Kel-Tech in March 2014.

Kel-Tech is a manufacturer and supplier of specialty chemicals and related services used in the drilling, production and transportation of oil and natural gas. The company was founded in 1983 and is headquartered in Midland, TX (www.keltechinc.com).  In March 2014, simultaneous with Arsenal’s buy of Kel-Tech, Kel-Tech acquired Danlin Industries from Hastings Equity Partners. Danlin, like Kel-Tech, is a supplier of specialty chemicals used in oil & gas exploration and production. The company is based in Thomas, OK (www.danlin.us).

“We are pleased to have worked with the Kel-Tech organization in creating a leading player in the oilfield production chemicals market.  During our partnership we successfully integrated Danlin, augmented the organization with management talent, and strengthened the company’s manufacturing facilities,” said Tim Zappala an Arsenal Partner who co-heads the firm’s specialty industrials group.

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 and fine chemicals; segments of healthcare; transportation and logistics; power generation; aerospace and 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 long term outlook for North American oil production remains positive and Kel-Tech’s relationships and geographic footprint in the major oil basins position them well to take advantage of the industry trends,” said Shawn Abrams, an Industry and Operating Partner in Arsenal’s specialty industrials group.

Clariant Corporation, the buyer of Kel-Tech, is based in Charlotte and operates as a subsidiary of Clariant AG, a publicly-traded specialty chemicals company, based near Basel in Muttenz, Switzerland (www.clariant.com).

© 2016 Private Equity Professional • 10-4-16

Riverside Keeps Growing Franchising Platform

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The Dwyer Group, a franchising platform company of The Riverside Company, has completed the add-on of Cumberland County Glass.

Cumberland County Glass (CCG) provides commercial glass glazing, fabrication, and installation services, primarily involving windows and doors used in new construction of commercial buildings. The company is based in Bowdoinham, ME (www.cumberlandcountyglass.com).

The Dwyer Group is one of the world’s largest franchising companies of trade service brands. CCG will be combined with Dwyer’s existing Portland Glass business, which is also based in Maine. Portland Glass provides repair and replacement services for residential, business and automotive glass needs (www.portlandglass.com).

The Dwyer Group, acquired by Riverside in August 2014, is now the owner of 13 service-based franchise organizations: Aire Serv, Glass Doctor, The Ground Guys, Mr. Appliance, Mr. Electric, Mr. Rooter, Mr. Handyman, Portland Glass, Rainbow International, Five Star Painting, Molly Maid, ProTect Painters, and Locatec.  These brands collectively have more than 2,500 franchises in ten countries.  The Dwyer Group was founded in 1981 and is headquartered in Waco, TX (www.dwyergroup.com).

The buy of CCG is the seventh add-on Dwyer and Riverside have completed since Riverside’s investment in 2014. The firm continues to seek other franchising companies to join Dwyer’s portfolio of service brands.

“We’re excited about the new capabilities CCG offers Portland Glass customers,” said Riverside Vice President Jason Fulton. “Combining these companies allows Portland Glass to offer more comprehensive commercial services and extends CCG’s footprint beyond Greater Portland and into Vermont and New Hampshire.”

Working with Mr. Fulton on the transaction for Riverside were Partner Sarah Roth, Senior Associate Marc Baudry, Associate Ryan Collins and Operating Partner Tom Anderson. Partner Anne Hayes worked on financing the transaction for the firm.

The Riverside Company is a global private equity firm focused on investing in and acquiring growing businesses valued at up to $400 million. Since its founding in 1988, Riverside has invested in more than 440 transactions. The firm’s international portfolio includes more than 80 companies. The firm is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

Madison Capital Funding, Ares Capital, Antares Capital, NXT Capital and NewStar Financial provided financing for this transaction.

© 2016 Private Equity Professional • 10-4-16

IGP Buys Test and Measurement Company

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Industrial Growth Partners has acquired SPL, a provider of testing services to the oil and gas industry. The firm acquired SPL through its $800 million fifth fund, Industrial Growth Partners V, LP.

SPL is a provider of hydrocarbon measurement, analysis and reporting services. SPL’s services are used by its oil and gas production and transport customers to evaluate the composition of the hydrocarbons they are producing in order to fine-tune production from wells, market products downstream, meet regulatory reporting requirements, and ensure accurate payment of royalties to leaseholders.  The company’s services are provided through a network of 8 labs and 14 field service locations across the US. SPL was founded in 1944 and is headquartered in Houston (www.spl-inc.com).

Industrial Growth Partners (IGP) intends to grow SPL by expanding its services into new geographies and pursuing strategic add-on acquisitions. “The SPL management team is excited to partner with IGP as we strengthen our market position and continue to aggressively pursue opportunities for growth across all facets of our business,” said Ian Milne, CEO at SPL.”IGP’s experience in the test and measurement markets, knowledge base in the energy sector, and strategic focus make them an ideal equity partner for us.”

Industrial Growth Partners provides equity capital to lower-middle market manufacturing and manufacturing services companies with revenues of $30 million to $100 million. The firm invests equity in a range of transactions involving a change of ownership, such as management buyouts, leveraged buyouts, corporate divestitures, recapitalizations and management buy-ins. The firm was founded in 1997 and is based in San Francisco (www.igpequity.com).

© 2016 Private Equity Professional • 10-4-16