American Securities Acquires Chemical Maker Hexion

American Securities has acquired chemical manufacturer Hexion Holdings at an enterprise valuation of $3.3 billion.

Hexion produces adhesives and specialty chemicals that are used in the aerospace, automotive, construction, industrial, transportation, and utilities industries. The company specializes in thermoset resins that enable the production of engineered wood products and other specialty materials. Hexion, led by CEO Craig Rogerson, operates out of 26 manufacturing facilities employing approximately 1,300 people globally.

“We look forward to continuing to serve our valued customers and accelerating our next phase of growth under American Securities’ ownership,” said Mr. Rogerson.

In September 2021, Hexion split its business into two independent companies, one represents the company’s epoxy-based coatings and composites products (acquired by Westlake Chemical for $1.2 billion in January 2022); and the second business, with approximately $1.4 billion in annual revenues and $272 million of EBITDA, retains the Hexion name and represent its adhesives, acids, and derivatives business. Based on the enterprise valuation of $3.3 billion and annual EBITDA of $272 million, the purchase price multiple for Hexion is 12.1x.

“Hexion is a market leader and leverages deep chemistry and application knowledge to support its customers in diverse end markets,” said Scott Wolff, a managing director of American Securities. “Over time, the company has optimized its portfolio and transformed its operations, and we are thrilled to partner with Hexion to support the next chapter of the company’s growth.”

American Securities invests in businesses with $200 million to $2 billion of revenue and $50 million to $250 million of EBITDA.  Sectors of interest include industrial manufacturing, specialty chemicals, aerospace and defense, energy, business services, healthcare, media, restaurants, and consumer products. The firm has more than $23 billion of capital under management and has offices in New York City and Shanghai.

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