BlueArc and Merit Exit Choice Adhesives

BlueArc Capital Partners and Merit Capital have completed the sale of Choice Adhesives to Innovative Chemical Products Group, a portfolio company of Audax.

Choice Adhesives is a maker of solvent-based, water-based, and hot melt adhesives and sealants. The Cincinnati-headquartered company’s products are used in the roofing, kitchen and bath, flooring, footwear, high-pressure laminate, furniture, recreational vehicle, and industrial sectors.

Choice Adhesives was formed in May 2018 by BlueArc and Merit through the merger of Choice Brands Adhesives and Slocum Adhesives with the senior managers of both businesses participating in the transaction. At the time of the merger, Slocum and Choice Brands had been working together for over eight years with Slocum manufacturing many of the products sold by Choice Brands.

Today, Choice Adhesives, led by CEO Bob Johnson, is headquartered in Cincinnati with manufacturing facilities in Lynchburg, Virginia (140,000 square feet) and the Dominican Republic.

“We’re happy and excited to join the ICP family,” said Mr. Johnson. “We have a long history of technological innovation and strong service in the adhesives industry, and we’re looking forward to continuing that journey in partnership with the ICP team.”

ICP is active in the formulation, manufacturing, and marketing of coatings, adhesives, sealants and elastomers used in the building materials, specialty construction, industrial, packaging, printing, and sports surfaces end markets. The company, headquartered near Boston in Andover, Massachusetts, operates multiple manufacturing facilities around the world.

ICP was formed in January 2016 when Audax combined two of its specialty chemical portfolio companies, California Products (acquired from Delos Capital in October 2015) and Nicoat (acquired in March 2015 from Caltius Equity Partners).

“Choice Adhesives has long brought innovative adhesive product technology to the market and has maintained strong relationships with their customers for decades,” said Doug Mattscheck, the CEO of ICP. “With the addition of Choice Adhesives to the ICP family, we’ll be enhancing our position in the roofing adhesive market to better serve our professional customers.”

BlueArc Capital Partners (BCP) is the private equity division of BlueArc Capital, a multi-strategy alternative asset management firm. BCP makes control investments primarily in founder-owned middle-market businesses with EBITDA between $5 million and $30 million across a range of industries. The firm was founded by Ronald Zazworsky, Jr. in August 2005 and is headquartered in Atlanta.

Merit Capital invests subordinated debt and equity capital of $15 million to $60 million in companies with at least $4 million of EBITDA that are active in the manufacturing, distribution and services industries. The firm makes both control and non-control investments primarily in partnership with family-owned companies, existing owner-managers, and with independent sponsors. Merit’s first four funds have been fully realized; its fifth fund has been partially realized; and its sixth fund – which closed in April 2018 with $536 million of capital – is currently being invested.

Audax, the owner of ICP, 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 and San Francisco.

Lazard Middle Market was the financial advisor to Choice Adhesives on this transaction.

© 2021 Private Equity Professional | May 21, 2021

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