Audax Closes Sale of Gabriel at 11x
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Audax Closes Sale of Gabriel at 11x

Audax Private Equity has closed its December-announced sale of Gabriel Performance Products to publicly traded Huntsman Corporation for $250 million in cash.

Akron-headquartered Gabriel is a maker of specialty additives and epoxy curing agents used in the coatings, adhesives, sealants and composite end-markets. Gabriel, led by CEO Seth Tomasch, operates three manufacturing facilities in Ohio, Pennsylvania and South Carolina.

“Audax has been a valuable partner in helping us grow Gabriel into a leading specialty chemicals manufacturer that delivers state-of-the-art, scalable, ready-made, and customized chemical solutions with exceptional customer service,” said Mr. Tomasch.

Audax acquired Gabriel in October 2014 and completed six add-on acquisitions during its ownership term. In 2019, Gabriel had revenues of $106 million 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.

“We are proud to have partnered with Seth and the Gabriel team in creating a leading platform serving the coatings, adhesives, and composites markets,” said Don Bramley, a managing director at Audax. “The company expanded its proprietary products organically and through acquisitions while investing in its direct commercial team, research & development capabilities, manufacturing facilities, and key talent to support and sustain continued growth. We wish continued success for Seth and the entire Gabriel organization as they embark on their next chapter of growth.”

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.

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 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.”

Audax invests in middle-market companies that have from $8 million to $50 million in EBITDA and enterprise values of $50 million to $400 million. Sectors of interest include business and consumer services; energy; healthcare; technology, media and telecom; and industrials including chemicals, infrastructure, and building materials. Audax has offices in Boston, New York, and San Francisco

Grace Matthews was the financial advisor to Gabriel on this transaction.

© 2021 Private Equity Professional | January 20, 2021

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