U.S. Zinc, a portfolio company of Aterian Investment Partners, has acquired EverZinc, a portfolio company of OpenGate Capital.
Houston-headquartered U.S. Zinc is a producer of zinc oxide, zinc dust, and zinc metal products used in the tire, chemical, coatings, and agriculture markets. U.S. Zinc is one of the largest producers of zinc oxide in the world with an annual capacity of over 150,000 metric tons. The company, led by CEO Joel Hawthorne, operates four facilities in Texas and Tennessee.
U.S. Zinc’s dust products are most often used in paints and coatings to inhibit corrosion and are also used in gold and silver mining as a precipitant in material recovery processes. Zinc dust is U.S. Zinc’s second-largest product line and the company’s Houston facility is the largest single-site, zinc dust plant in the world. The company’s prime western grade (98% pure) zinc metal is used in galvanizing applications to coat steel materials, protecting them from corrosion and rust.
Aterian acquired U.S. Zinc from Votorantim Group in December 2018. “We built a long-term thesis around zinc chemistry, starting with our platform investment in U.S. Zinc,” said Christopher Thomas, a co-founder and partner at Aterian. “As one of the most widely available and sustainable metals in the world, zinc is uniquely recyclable and has applications critical to our future. This investment further expands on our vision as the organization will continue to partner and innovate with its customers to lead the industry through technological and sustainable alternatives and solutions.”
EverZinc is a provider of zinc materials including fine and ultra-fine zinc powders, zinc oxides, and battery zinc powders. The company’s products are used in a range of applications, including corrosion inhibiting paints, tires, pharmaceuticals, ceramics, glass, sunscreen, and alkaline batteries.
Annually, EverZinc processes more than 200,000 metric tons of materials through 10 production sites located in Belgium, Canada, China, the Netherlands, Norway, and Malaysia. The company, led by CEO Vincent Dujardin, is headquartered 70 miles east of Brussels in Liège, Belgium.
OpenGate acquired EverZinc, then Umicore Zinc Chemicals, from its parent company Umicore in November 2016. During OpenGate’s ownership term, the company’s EBITDA grew by 2x through both organic growth and the acquisition of G.H. Chemicals, a Canadian manufacturer of zinc oxide products using the French Process (an indirect manufacturing process), in January 2019.
“When we acquired EverZinc, we believed the business had tremendous potential for geographic expansion and innovation, and, under Vincent’s leadership, new products were developed and new markets penetrated, which re-positioned the company for growth and enhanced profitability,” said Julien Lagrèze, a partner at OpenGate. “It has been a truly rewarding experience working with Vincent and his team, and we’re confident that EverZinc is in great hands as it embarks on a new phase of growth.”
According to Aterian, the combination of these two companies creates one of the largest zinc chemistry businesses in the world. The combined company will operate under the EverZinc name and will be headquartered in Houston. Aterian, U.S. Zinc’s controlling shareholder, will continue to own the combined company.
“We’re excited to partner with Aterian and the board to lead this new combined organization forward into the future,” said Mr. Dujardin, who will lead the combined company as both president and chief executive officer. “This strategic combination brings together two industry pioneers. By combining our comprehensive zinc chemistry platforms, employee base, proven R&D and technology capabilities and specializations, we will further our leadership in catapulting the new organization years ahead on the technology curve.”
“Aterian will continue to support EverZinc through investment in capacity, technology and innovation,” said Joshua Ciampa, a managing director at Aterian. “Global applications for zinc are reaching a critical inflection point and we are pleased to be in a position to leverage our European or Asian technology for capacity in North America, and vice-versa.”
Aterian invests from $10 million to $100 million in middle-market businesses with $50 million to $750 million in revenue and $10 million to $50 million in EBITDA. The firm’s sectors of interest include industrials, niche manufacturing, chemicals and material science, industrial services, business services, value-added distribution, consumer, and transportation and logistics. Aterian has offices in New York City and Coral Gables, Florida.
OpenGate acquires companies that have revenues from $50 million to $1 billion and specializes in corporate carve-outs and complex situations. The firm was founded in 2005 and is based in Los Angeles with an additional office in Paris.
Jefferies and Stifel were the financial advisors to EverZinc and OpenGate Capital, and Moelis & Company was the financial advisor to U.S. Zinc and Aterian.
© 2022 Private Equity Professional | June 23, 2022
