automotive products

Avista Sells Armored AutoGroup to Spectrum Brands

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Spectrum Brands has signed an agreement to acquire Armored AutoGroup from Avista Capital Partners for $1.4 billion in cash and assumed debt.

Armored AutoGroup is a consumer products company consisting primarily of the Armor All and STP brands – two of the most recognizable brands in the automotive aftermarket – and the A/C PRO brand in the do-it-yourself automotive air conditioner recharge category.   Avista acquired Armor All and STP in September 2010 from Clorox.  In March 2014, Avista completed the add-on acquisition of the A/C PRO brand from Kinderhook Industries.

Armor All has the top US market share in the appearance products category with its line of protectants, wipes, tire and wheel care products, glass cleaners, leather care products, air fresheners and washes. STP has the third highest US market share in the performance chemicals category and offers a line of oil and fuel additives, functional fluids and automotive appearance products.  A/C PRO holds the top US position in the do-it-yourself air conditioner recharge category.

Nearly 80 percent of Armored AutoGroup’s annual revenues are generated in the US, primarily through auto retailers, mass merchandisers, home improvement centers and dollar stores.  Armored AutoGroup is expected to generate net sales of more than $440 million and adjusted EBITDA of $140 million for the calendar year ending December 31, 2015.

Spectrum Brands (NYSE: SPB) is a diversified consumer products company and a supplier of consumer batteries, residential locksets, residential builders’ hardware, faucets, shaving and grooming products, personal care products, small household appliances, specialty pet supplies, lawn and garden and home pest control products, and personal insect repellents.  Spectrum Brands had net sales of approximately $4.4 billion in fiscal 2014. The company is headquartered near Madison in Middleton, WI (www.spectrumbrands.com).

Avista Capital Partners, with over $6 billion of capital under management, makes control or influential minority investments in growth-oriented energy, healthcare, communications & media, industrials, and consumer businesses.  The firm was founded in 2005 and is based in New York with offices in Houston and London (www.avistacap.com).

The $1.4 billion cash purchase price will be funded through a combination of new debt and $500 million of common stock.  Spectrum Brands has received debt financing commitments from Credit Suisse, Deutsche Bank and Jefferies.

Credit Suisse Securities and Deutsche Bank acted as financial advisors to Spectrum Brands and JPMorgan Securities served as lead financial advisor to Armored AutoGroup.

This transaction is expected to close before the end of June 2015.

© 2015 PEPD • Private Equity’s Leading News Magazine • 4-29-15

Insight Equity Acquires Material Sciences Corporation

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New Star Metals, a portfolio company of Insight Equity, has acquired Material Sciences Corporation, a manufacturer of acoustical and coated products primarily used in automotive applications.  Insight Equity acquired New Star Metals in August 2012.

“The MSC transaction represents the third add-on acquisition for New Star under our ownership,” said Victor Vescovo, COO & Managing Partner at Insight Equity. “We remain interested in continuing to expand New Star through similar opportunities in the future.”

Material Sciences Corporation (MSC) has revenues of approximately $125 million and is a provider of materials used in acoustical and coated applications such as brakes, body panels, and engine components. MSC has two primary product segments: acoustical (anti-noise and vibration products, including the company’s trademarked Quiet Steel reduced vibration metal) and coated (decorative and protective metal coatings). The company’s products are used by the appliance, automotive, building systems, computer, construction, furniture, HVAC, lighting, and telecommunications industries. Automobile manufacturers are among the company’s largest clients. MSC (NASDAQ: MASC) was founded in 1971 and is headquartered near Chicago in Elk Grove Village, IL (www.matsci.com).

“We are excited to complete the purchase of Material Sciences. The addition of this company to New Star enhances our strategy to participate in the light-weighting of automobiles to meet the pending CAFE standards,” said Pat Murley, CEO of New Star.

New Star Metals provides metal processing, building products and supply chain management across an array of end markets. The company operates through five divisions: Canfield Coating, Electric Coating Technologies, Material Sciences Corporation, Premier Resource Group, and World Class Corrugating. New Star is headquartered near Chicago in Burr Ridge, IL (www.newstarmetals.com).

“We are thrilled to complete another public-to-private transaction and we look forward to working with Pat Murley and the New Star team to realize the potential synergies from this acquisition,” said Jack Waterstreet, a Principal at Insight Equity.

Insight Equity makes control investments in middle market, asset intensive companies across a range of industries and specializes in partnering with companies experiencing some level of underperformance. Insight Equity also seeks complex and challenging situations, including public to private transactions, corporate divestitures, bankruptcies, restructurings and private family ownership. The firm is based near Dallas in Southlake, TX and also has an office in New York (www.insightequity.com).

© 2014 PEPD • Private Equity’s Leading News Magazine • 3-31-14