Aterian Acquires U.S. Zinc

Aterian Investment Partners has acquired U.S. Zinc from Votorantim Group.

U.S. Zinc is a producer of zinc oxide, zinc dust, and prime western grade (98% pure) zinc metal products used in the tire, chemical, coatings, and agriculture markets. The company, led by CEO Tracy Baugh, has production facilities in Clarksville, TN; Millington, TN; Changshu, China; and Houston, TX (headquarters) (www.uszinc.com).

U.S. Zinc is one of the largest producers of zinc oxide in the world with a global capacity of over 150,000 metric tons per year. The company’s zinc dust products are most often found in paints and coatings to inhibit corrosion and are also used by gold and silver miners as a precipitant in the recovery process. Zinc dust is U.S. Zinc’s second-largest product line and the company’s Houston facility is the largest single-site, zinc dust plant in the world. The company’s prime western zinc metal is sold to the galvanizing industry to coat steel materials, protecting them from corrosion and rust.

“This transaction will give us the opportunity to further invest in U.S. Zinc and evolve with our customers and industry,” said Mr. Baugh. “By operating as a stand-alone we will be well positioned to capitalize on a wide range of new growth opportunities.”

Aterian invests up to $65 million in small-to-middle market businesses with $25 million to $500 million in revenues that are underperforming, turnarounds or otherwise unique situations. Aterian held a first and final closing of Aterian Investment Partners III LP with $350 million of committed capital in July 2018. Aterian’s earlier fund closed in December 2013 with $257 million of capital commitments. The firm was founded in 2009 by Brandon Bethea, Michael Fieldstone and Christopher Thomas and is based in New York (www.aterianpartners.com).

“We are proud to invest and partner with U.S. Zinc, its experienced management team and dedicated employees,” said Christopher Thomas, a partner at Aterian. “We look forward to supporting investments in research, technology, product expansion and capacity, both domestic and international.”

The metals industry is not new to Aterian. In August 2018 the firm acquired Pioneer Metal Finishing, a provider of outsourced anodizing, plating, hardcoat, adhesive, electroless nickel, and other surface treating services. Green Bay, WI-based Pioneer operates seven facilities across the United States in Michigan (3), Minnesota, Wisconsin, Oregon, Indiana, and one facility in El Marques, Mexico (www.pioneermetal.com).

“U.S. Zinc further complements Aterian investments in industry-leading industrial companies where we can support strategic growth initiatives,” said Joshua Ciampa, a principal at Aterian. “Working alongside management and Votorantim, we diligently completed the cross-border carve-out in approximately 60 days.”

Votorantim Group, the seller of U.S. Zinc, is a family-owned industrial conglomerate with interests in finance, cement, energy, paper, iron, and steel. The company had revenues in 2017 of US$8.2 billion and is headquartered in São Paulo, Brazil (www.votorantim.com.br/en).

Moelis & Company was the financial advisor to Votorantim Group.

© 2019 Private Equity Professional | January 8, 2019

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