Sun Closes Sale of Demilec

Sun Closes Sale of Demilec

Sun Capital Partners has closed on the sale of its portfolio company Demilec, one of North America’s largest manufacturers of spray foam insulation, to Huntsman Corporation for $350 million. Sun Capital acquired Demilec in September 2013.

Demilec manufactures both rigid and semi-rigid spray polyurethane foam (SPF) insulation that is used in residential and commercial applications. The company’s products are sold directly to insulation installers and well as through distributors. Demilec has annual revenues of approximately $170 million and two manufacturing facilities located in Arlington, TX (headquarters) and Boisbriand, QC (

When Sun Capital acquired Demilec in September 2013, the company was being operated as four separate business units. The firm saw an opportunity to consolidate the business under a new management team, resulting in productivity improvements and overall cost reductions. Sun Capital also invested in Demilec, allowing it to develop new products that increased Demilec’s line of offerings and market share.

“Demilec has been an exciting opportunity for Sun Capital Partners, and its success highlights our firm’s strengths in building industry-leading management teams and enhancing operational proficiency,” said Marc Leder, Co-CEO at Sun Capital. “Together with the management team assembled, we assisted Demilec in its efforts to increase market share at a time when the SPF product category was beginning to grow in importance compared to other forms of insulation.”

Huntsman (NYSE: HUN), the buyer of Demilec, is a manufacturer and marketer of a range of chemical products with 2017 revenues of approximately $8 billion.  The company has more than 75 manufacturing, R&D and operations facilities in 30 countries and employs more than 10,000. Huntsman is headquartered in The Woodlands, TX (north of Houston) and has executive offices in Salt Lake City, UT (

Based upon full-year 2018 EBITDA estimates, the $350 million purchase price for Demilec represents a purchase price multiple of approximately 11.5x or, if pro forma synergies are included, 7.5x.

“This bolt-on acquisition is a great fit to our core strategy to move downstream,” said Peter Huntsman, Chairman, President and CEO of Huntsman. “The integration of Demilec into our existing polyurethanes business offers significant synergies and delivers substantially higher and very stable margins by pulling through large amounts of upstream polymeric MDI into specialized spray foam systems. This integrated business will have greater than 25% EBITDA margins and double-digit growth.”

Sun Capital invests in leveraged buyouts, equity, and debt in companies that can benefit from its in-house operating professionals and experience. Sun Capital has invested in and managed more than 340 companies worldwide with combined sales in excess of $45 billion since the firm’s inception in 1995. The firm has offices in Boca Raton, Los Angeles and New York, and affiliates in London and Shenzhen (

Lazard and Piper Jaffray served as financial advisors to Demilec on this transaction.

© 2018 Private Equity Professional | April 24, 2018

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