SK and Edgewater Form Luxium, Carves Crystals Business from Saint-Gobain
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SK and Edgewater Form Luxium, Carves Crystals Business from Saint-Gobain

Luxium's annual EBITDA is estimated at $16 million. Based on the $214 million purchase price this equates to a 13.4x valuation multiple.

Luxium’s crystals absorb gamma photons and convert some of their energy into visible light and ultraviolet photons. Its products are used in the medical imaging, security and border protection, semiconductor, aerospace and defense, oil and gas markets.

SOURCE: Luxium Solutions

SK Capital Partners and Edgewater Capital Partners have formed Luxium Solutions to acquire the scintillation and photonic crystals business of publicly traded Saint-Gobain for $214 million.

Scintillation crystals are materials that absorb gamma photons and convert some of their energy into visible light and ultraviolet photons. In layman’s terms, these materials emit light when they absorb particles or electromagnetic waves. Scintillation crystals are widely used in radiation detection applications, as well as in photonics and power electronics applications using sapphire (for harsh environments) and garnet substrates.

Source: Luxium Solutions

Luxium’s products are used in the medical imaging, security and border protection, semiconductor, aerospace and defense, oil and gas markets. The company has a portfolio of 174 patents and is vertically integrated with capabilities in crystal purification and growth, cutting and finishing, packaging, electronics integration, and research and development.

Luxium is headquartered 40 miles southeast of Cleveland in Hiram, Ohio, with five additional manufacturing facilities in Newbury, Ohio (1); Milford, New Hampshire (1); India (1); and France (2).

Annual revenues for the scintillation and photonic crystals business are approximately $80 million with an estimated EBITDA of $16 million. Based on the $214 million purchase price this equates to a 13.4x valuation multiple.

Mike Cahill, Vice President – Crystals at Saint-Gobain, will remain with the business as the new CEO of Luxium. Mr. Cahill has led the business under Saint-Gobain since 2015.

“We are excited to enter Luxium’s next period of growth in partnership with SK Capital, Mike Cahill, and the whole Luxium team. We are confident in the differentiated and mission-critical technology that Luxium brings to the market, the stewardship of a qualified management team, and the experience that Edgewater and SK Capital bring to the Company,” said Ryan Meany, a managing partner at Edgewater.

“At Luxium, we are all excited to collaborate with the SK Capital and Edgewater teams to usher in the company’s next phase of growth as an independent player,” said Mr. Cahill. “The transition in ownership has been seamless and we have been pleased to continue providing our customers with the same quality of service they’ve known for years. Our next chapter will be defined by an enhanced commercial strategy and a product portfolio that provides even greater value to our customers, suppliers, and employees.”

“We believe Luxium’s leading scintillation technologies and unique ability to solve problems with applied material sciences, combined with a strong existing base of talent will transform the company into an independent leader in the industry that acts as a true value-add partner for the various sectors it serves,” said Mario Toukan, a managing director at SK Capital.

SK Capital invests in the specialty materials, chemicals, and pharmaceutical sectors and typically invests equity of $100 million to $200 million in each portfolio company. In February 2019, the firm held a final closing of SK Capital Partners Fund V LP with total capital of $2.1 billion. SK Capital was co-founded by Barry Siadat and Jamshid Keynejad and is based in New York City.

Edgewater Capital Partners invests in lower middle market performance materials and services businesses. The firm has specific expertise in specialty chemicals, life sciences, advanced materials, and engineered components. Platform acquisitions will have revenues up to $100 million and EBITDA of less than $25 million. The firm was founded in 1998 and is headquartered in Cleveland.

Publicly traded Saint-Gobain (CODYY: OTCMKTS) is a French multinational corporation that produces and distributes a variety of construction and high-performance products including abrasives, building materials, ceramics, glass, plastics, and textiles. The company has annual revenues of more than $44 billion. Saint-Gobain was founded in Paris in 1665 as a mirror manufacturer and today is headquartered near Paris in Courbevoie, France.

Debt financing for this transaction was provided by KeyBanc Capital Markets.

© 2022 Private Equity Professional | December 6, 2022

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