H.I.G. Keeps Building Antifreeze Giant

H.I.G. Keeps Building Antifreeze Giant

Recochem, a portfolio company of H.I.G. Capital, has acquired KOST USA, a maker of private label and branded coolants and antifreezes.

KOST’s products include ethylene glycol and propylene glycol-based antifreezes and coolants that are used in automotive, heavy-duty, on-road, off-road, marine and stationary applications; fire resistant hydraulic fluids used in high-pressure and high-temperature environments; heat transfer fluids used in HVAC, refrigeration, pharmaceutical and chemical processing applications; and natural gas dehydration fluids to remove water from natural gas to avoid corrosion in processing and transmission equipment.

According to Cincinnati-based KOST, it is the third-largest maker of coolants and antifreezes in the United States. The company was founded in 1985 by Tom Overdeck and is today led by CEO Steve Overdeck.

Recochem is a manufacturer of branded, private label and bulk automotive aftermarket and household fluids used in consumers and industrial applications. The company’s products include windshield wiper fluids, engine coolants, diesel exhaust fluid, paint thinners, solvents, and other specialty chemicals sold in general merchandise, automotive aftermarket, and home improvement retailers worldwide. Recochem, led by CEO Richard Boudreaux, was founded in 1951 and is headquartered in Montreal.

“The acquisition of KOST is strategically important for Recochem, significantly increasing the company’s presence in the United States. The combined business is a leading manufacturer and distributor and one of the few scaled players in automotive aftermarket consumable fluids across North America,” said Mr. Boudreaux. “KOST has a loyal customer following and an excellent reputation for quality products and outstanding service. We are very excited about partnering with the team at KOST to support the company’s continued expansion.”

“We are proud to have supported Recochem in its acquisition of KOST,” said Keval Patel, a managing director at H.I.G. “KOST is a significant player in the US coolant market, with a complementary suite of products and strong customer base. The transaction fits perfectly into Recochem’s strategy of further expanding into the US and acquiring best-in-class companies that produce automotive aftermarket consumable fluids with significant value creation opportunities.”

KOST is the fourth add-on acquisition completed by Recochem since being acquired by H.I.G. from Swander Pace Capital in August 2018.

H.I.G. specializes in providing debt and equity capital to small and medium-sized companies and invests in management buyouts, recapitalizations, and corporate carve-outs of both profitable as well as underperforming manufacturing and service businesses. Founded in 1993, H.I.G. has invested in more than 300 companies and has a current portfolio of 100 companies with combined sales in excess of $30 billion. H.I.G. has $40 billion of equity capital under management and is headquartered in Miami with additional offices in New York, Boston, Chicago, Dallas, Los Angeles, San Francisco, Atlanta, and Stamford.

In September 2020, H.I.G. held an above-target close of H.I.G. Capital Partners VI LP with aggregate capital commitments of $1.3 billion.

© 2020 Private Equity Professional | December 4, 2020

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