Audax Private Equity has agreed to sell specialty chemical maker Gabriel Performance Products to publicly traded Huntsman Corporation for $250 million in cash.
Akron-headquartered Gabriel Performance Products is a maker of specialty additives and epoxy curing agents used in the coatings, adhesives, sealants and composite end-markets. Gabriel operates three manufacturing facilities in Ohio, Pennsylvania and South Carolina.
Gabriel had revenues of $106 million in 2019 with an adjusted EBITDA of $23 million. This yields an 11x EBITDA valuation multiple and, according to Huntsman, an 8x valuation multiple of pro forma adjusted EBITDA including expected synergies.
Huntsman has been actively pursuing transactions in 2020. In May, Huntsman acquired CVC Thermoset Specialties, a maker of specialty additives and epoxy curing agents with two manufacturing facilities in Ohio and New Jersey, for $300 million in cash from Emerald Performance Materials, a portfolio company of American Securities. CVC had revenues of $115 million in 2019 and the $300 million purchase price was equal to an adjusted EBITDA multiple of 10x, or 7x if expected operating synergies are included.
“With the buy of Gabriel, we conclude a series of strategic initiatives in our advanced materials division that we started in 2019 before the COVID-19 pandemic,” said Peter Huntsman, the CEO of Huntsman. “Our initial intent was to complete the acquisitions of Gabriel and CVC simultaneously, together with the divestiture of our India DIY business earlier this year. Despite the challenges created by COVID, I am pleased that we have already closed on two of the transactions and intend to close on the acquisition of Gabriel within the first quarter of 2021.”
“The acquisition of Gabriel broadens the offering in our specialty portfolio and is complementary to our recent acquisition of CVC,” said Scott Wright, the president of Huntsman’s advanced materials division. “Gabriel makes highly specialized toughening and curing agents and other additives used in a wide range of composite, adhesive and coatings applications. We expect that the Gabriel business will strengthen our North America footprint and provide significant commercial synergies.”
Huntsman (NYSE: HUN) is a manufacturer and marketer of a range of chemical products with 2019 revenues of approximately $7 billion. The company has more than 70 manufacturing, R&D and operations facilities in 30 countries and employs more than 9,000. Huntsman is headquartered north of Houston in The Woodlands, Texas and has executive offices in Salt Lake City, Utah.
The buy of Gabriel is expected to close in the first quarter of 2021.
© 2020 Private Equity Professional | December 8, 2020
