Platte River Equity has acquired MFG Chemical, a custom and toll manufacturer of specialty chemicals, in partnership with the company’s founding family and management team. Platte River invested out of its 2012 vintage $405 million third fund, Platte River Equity III, LP, to acquire MFG.
MFG is a specialty chemical manufacturer of polymers, surfactants and esters used in various applications in the oil field, water treatment, mining, coatings, agricultural and other industrial markets. The company was founded in 1981 by Charles Gavin, III, the company’s Chairman of the Board. Keith Arnold is MFG’s President and CEO. MFG is headquartered north of Atlanta in Dalton, GA (www.mfgchemical.com).
“For almost 40 years, MFG has leveraged its differentiated position in maleic anhydride and glacial acrylic acid to develop and manufacture new products in partnership with our customers to better serve their needs,” said Mr. Gavin. “We believe that Platte River is the right partner to help us accelerate the company’s growth in adjacent chemistries and new markets,” said Mr. Arnold.
Around 50% of world maleic anhydride output is used in the manufacture of unsaturated polyester resins (UPR). Chopped glass fibers are added to UPR to produce fiberglass reinforced plastics that are used in a range of applications such as pleasure boats, bathroom fixtures, automobiles, tanks and pipes. Acrylic acid and its esters readily combine to form polyacrylic acids which are used in the manufacture of various plastics, coatings, adhesives, elastomers, as well as floor polishes, and paints.
“We were attracted to MFG because of its strong reputation as a value-added, niche supplier to small and global chemical companies. We welcome MFG to the Platte River portfolio and look forward to partnering with Keith Arnold and his leadership team to take full advantage of the available growth opportunities,” said Kris Whalen, Managing Director of Platte River.
Platte River makes equity investments of $20 million to $80 million in lower middle-market companies with enterprise values between $40 million and $250 million. The firm focuses on investing in the aerospace and transportation; energy and power; agriculture and chemicals; and metals and minerals. Platte River is based in Denver (www.platteriverequity.com).
Monroe Capital provided financing for the transaction and Grace Matthews served as sell-side advisor to MFG.
© 2017 Private Equity Professional | June 27, 2017
