One Equity Partners has agreed to sell its portfolio company Sonneborn to publicly-traded HollyFrontier for $655 million. One Equity acquired Sonneborn in March 2012 from Sun Capital Partners.
Sonneborn is a manufacturer and supplier of high-purity specialty hydrocarbons including white oils, petrolatums (petroleum jelly) and microcrystalline waxes (de-oiled petrolatum). White oils are highly refined mineral oils that are extremely pure, stable, colorless, odorless, non-toxic and chemically inert. The term “white oil” is a misnomer, in that they are not white at all, but crystal clear.
Many of the largest personal care, cosmetic, pharmaceutical, and food processing companies use Sonneborn’s products for personal care items such as creams and lotions, cosmetics, and pharmaceutical ointments, as well as for food processing, agricultural dust suppression, polymer processing, telecommunications wire and cable, and refrigeration lubricants. Sonneborn has manufacturing facilities in both the US and The Netherlands and is headquartered in Parsippany, NJ (www.sonneborn.com).
HollyFrontier (NYSE: HFC) is an independent petroleum refiner and marketer of gasoline, diesel fuel, jet fuel and other specialty products. The company has annual revenues of more than $14 billion and is headquartered in Dallas (www.hollyfrontier.com).
Sonneborn has generated approximately $66 million of EBITDA over the 12-month period ended July 2018. This results in an EBITDA purchase price multiple of 9.9x. HollyFrontier has identified $20 million in potential annual synergies, including logistics and operations cost savings, which (if realized) results in an Adjusted EBITDA purchase price multiple of 7.6x.
HollyFrontier’s acquisition of Sonneborn is part of the company’s downward integration strategy into high margin specialty products and will complement HollyFrontier’s existing lubricants and specialty products business.
“We are pleased to announce the acquisition of Sonneborn, with its strong global presence and quality portfolio of finished lubricants and specialty products,” said George Damiris, President and CEO of HollyFrontier. “This transaction demonstrates our continued commitment to the finished lubricants business and is expected to bring outstanding value to our shareholders and to the customers and employees at both companies.”
One Equity Partners is a middle-market private equity firm that invests in industrial, healthcare, and technology companies that are based in North America and Europe. Since 2001, the firm has invested in more than 150 transactions worldwide. One Equity, founded in 2001, spun out of JP Morgan in 2015. The firm has offices in New York and Chicago, and an advisory office in Frankfurt, Germany (www.oneequity.com).
Goldman Sachs & Co. was the financial advisor to HollyFrontier on this transaction which is expected to close in 2019.
© 2018 Private Equity Professional | November 13, 2018
