Energy and chemical-focused Black Bay Energy Capital has sold NexGen Chemical Technologies to Foremark Performance Chemicals, a portfolio company of SK Capital Partners.
NexGen is a provider of oilfield services and chemical technologies used in the upstream, midstream and downstream energy sectors. The company’s products are used to improve efficiency, environmental impact, and total cost of operations for exploration, production, and midstream operators.
NexGen was founded in 2018 by Black Bay CEO Chris Williamson and CTO James Begeal to develop chemical compounds for treating sour natural gas (also known as natural gas sweetening). Sour natural gas is a term used to describe natural gas that contains a significant amount of hydrogen sulfide (H2S), a colorless and toxic gas, that can be found in industrial processes, oil and gas operations, and wastewater treatment.
“We couldn’t have asked for a more committed, patient, and hard-working financial partner than the Black Bay team,” said Mr. Williamson. “Their experience in the oil and gas and chemical sectors, specifically their understanding of the sour gas landscape, was invaluable as we recruited key players to our team and scaled the business.”
NexGen specializes in non-triazine H2S scavenger chemistry, a type of chemical compound that is used to remove or neutralize H2S gas. More traditional H2S scavengers such as MEA triazine (aka monoethanolamine triazine) contain triazine compounds, which are effective but have certain limitations and environmental concerns.
On the other hand, non-triazine H2S scavenger chemistry offers an alternative approach that does not involve triazine compounds. As a more environmentally friendly compound, non-triazine H2S is increasingly being used in the energy industry instead of MEA triazine to control and eliminate H2S gas.
Foremark’s acquisition of NexGen will enable a rapid scale-up of manufacturing for ScavGen 1014, NexGen’s flagship non-triazine H2S compound.
Foremark Performance Chemicals specializes in the development, production, and distribution of specialty chemicals including natural gas sweeteners, chemical intermediates, and agriculture fertilizers. Foremark is headquartered near Houston in League City, Texas, and operates a high automation plant in La Porte, Texas, that is among the world’s largest triazine, formalin and UFC (Urea Formaldehyde Concentrate) production facilities. SK Capital acquired Foremark in May 2017.
“The market need for more efficient natural gas sweetening continues to grow, and Black Bay, Foremark, and SK all understand and appreciate how important this is,” said Mr. Begeal. “We are thankful for the partnership with Black Bay and we’re very excited to be partnered with Foremark and SK going forward.”
“The NexGen team has embodied what Black Bay looks for in a portfolio company management team. Chris, James, Ali Yousef, Dallas Watson, and the rest of the NexGen team are highly technical and driven market experts who were true partners. We are thankful for their partnership and thrilled to watch the next chapter of the NexGen story unfold under Foremark and SK Capital’s ownership,” said Guy Cook, a partner at Black Bay.
“Innovative, efficient, and economic technologies are required to enable the transition in energy and chemical markets,” added Tom Ambrose, a partner at Black Bay. “The NexGen team embraced these goals and built a world-class company and technology suite around this thesis. We are proud to have been a part of NexGen and excited to deliver a fantastic return to our investors.”
Black Bay invests up to $30 million in equity in North American energy and specialty chemical companies that have up to $25 million in EBITDA. New Orleans-headquartered Black Bay is currently investing out of its second fund and has $565 million of assets under management.
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 is currently raising its sixth fund with a $2.75 billion target and a $3.5 billion hardcap. SK Capital was co-founded by Barry Siadat and Jamshid Keynejad and is based in New York City.
Houston-headquartered investment bank PPHB (Parks Paton Hoepfl & Brown) was the financial advisor to NexGen on this transaction. The PPHB team was led by Partner Joe Buchanan.
© 2023 Private Equity Professional | May 24, 2023
