Balmoral has agreed to acquire publicly traded Trecora Resources at an enterprise value of $247 million.
Trecora (NYSE: TREC) is a manufacturer of specialty petrochemicals and synthetic waxes. The company is led by CEO Pat Quarles and is headquartered near Houston in Sugar Land, Texas.
Trecora’s specialty petrochemical products (SPP) group is located near Houston in Silsbee, Texas and produces high purity hydrocarbons and other petroleum-based products including isopentane, normal pentane, isohexane and hexane. SPP’s products are used to produce polyethylene, packaging, polypropylene, polystyrene, and urethane foams.
Trecora’s synthetic wax segment (SWG) group is located near Houston in Pasadena, Texas. SWG’s products include polyethylene and poly alpha olefin waxes that are used in the production of paints and inks, adhesives, coatings, lubricants, printer toner, and for fragrance retention in candles.
“We are excited to enter this new chapter with Balmoral, which shares our enthusiasm for the future of our business and our opportunities for growth,” said Mr. Quarles.
For the trailing twelve months, Trecora had revenues of $301 million and an adjusted EBITDA of $21.7 million. Based on an enterprise valuation of $247 million, this represents an 11.4x valuation multiple.
“This transaction follows careful consideration and negotiation by the board and concludes a deliberate and comprehensive strategic review process undertaken over the past seven months,” said Karen Twitchell, the chairman of the Trecora board of directors. “Beginning in October 2021, we contacted 72 financial and strategic acquirers and held discussions with several parties, including Balmoral, through a formal, competitive process. Our board believes this transaction maximizes value for shareholders, who will receive a significant premium and immediate and certain value for their shares.”
“Having followed Trecora for years, we’re encouraged by its strong customer relationships and product demand,” said David Shainberg, a managing director at Balmoral. “This is Balmoral’s fourth acquisition in the chemicals sector, and we are excited to contribute to Trecora’s continued success as a private company.”
Balmoral’s earlier specialty chemical investments include StyroChem, a Quebec-based manufacturer of expandable polystyrene (May 2021); PolySource, an Ohio-based producer of expandable polystyrene (October 2021); and Epsilyte, an Illinois-based maker of expandable polystyrene (October 2020).
Los Angeles-headquartered Balmoral invests in corporate carve-outs, restructurings and other special situations. The firm targets investments of $5 million to $60 million of equity in companies with $30 million to $800 million of revenues.
Guggenheim Securities is the financial advisor to Trecora on this transaction, and Piper Sandler is the financial advisor to Balmoral.
© 2022 Private Equity Professional | May 24, 2022
Carousel Capital has acquired Quality Automotive Services (QAS), a provider of oil changes and other automotive preventative maintenance services.
Carousel invests in non-cyclical and growth-oriented companies headquartered in the southeastern United States. Typical targets will have enterprise values of up to $200 million and EBITDA of at least $3 million. Sectors of specific interest include business, consumer and healthcare services. Carousel was founded in 1996 and is led by managing partners Charles Grigg and Jason Schmidly.
“We are impressed with the great job that Andrew Slattery and Matt McKeown have done in building the fastest-growing franchisee within the best-in-class VIOC system,” said Peter Clark, a partner at Carousel. “VIOC is a people-first, results-driven organization with an extraordinary track record of results — traits Carousel Capital shares with the brand. The VIOC SuperPro operating model and its ability to leverage data and technology has helped to deliver 15 years of same-store sales growth.”
Atlantic Street Capital has agreed to sell Advancing Eyecare, a provider of ophthalmic instruments, to Cornell Capital.
“AEC’s trusted brands and broad portfolio of high-quality products and services have supported our customers’ daily operations and growth needs since our founding, and we are excited to take our company to new heights in partnership with Cornell,” said Mr. Staley. “We look forward to leveraging Cornell’s expertise and our multi-channel platform and strong relationships to capitalize on organic and inorganic growth initiatives, accelerate the development of top-quality product and service offerings and unlock enhanced value for customers.”
“Since forming the company, we executed on our plan to develop a broad range of technology, products, and services whose combined scope and leading brands provide the highest level of eye care for patients,” said Andy Wilkins, a managing partner at Atlantic Street. “We are proud to have played a role in further building the company’s leadership position. Advancing Eyecare has dramatically enhanced the services delivered to patients and we are very happy with our partnership with Brad and his team.”
“AEC’s broad portfolio of innovative products and world-class service and tech support have positioned the company as a leader in the attractive multi-billion-dollar ophthalmic products and services market,” said Stephen Trevor, a partner at Cornell. “As the demand for eye care continues to drive market growth and the industry continues to transition toward more advanced technologies and digital capabilities, AEC is uniquely well suited to meet comprehensive customer needs as an end-to-end service provider.”
Benford Capital Partners has held a first, final, above target, and hard cap closing of its second investment fund, Benford Capital Partners II LP (BCP II), with $200 million of limited partner commitments.
“We are extremely pleased that nearly every BCP I investor committed to BCP II,” said Edward Benford, a managing director at Benford Capital. “We are grateful for their support and look forward to executing the same operationally-focused investment strategy to successfully scale lower middle market platforms.”
“Over time, we have built an outstanding team of investment and operating professionals enabling the firm to dedicate more resources to our portfolio companies and implement the value creation frameworks which are key to our process and success,” said Benjamin Riefe, a managing director at Benford.
