specialty additives

Audax Closes Sale of Gabriel at 11x

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Audax Private Equity has closed its December-announced sale of Gabriel Performance Products to publicly traded Huntsman Corporation for $250 million in cash.

Akron-headquartered Gabriel is a maker of specialty additives and epoxy curing agents used in the coatings, adhesives, sealants and composite end-markets. Gabriel, led by CEO Seth Tomasch, operates three manufacturing facilities in Ohio, Pennsylvania and South Carolina.

“Audax has been a valuable partner in helping us grow Gabriel into a leading specialty chemicals manufacturer that delivers state-of-the-art, scalable, ready-made, and customized chemical solutions with exceptional customer service,” said Mr. Tomasch.

Audax acquired Gabriel in October 2014 and completed six add-on acquisitions during its ownership term. In 2019, Gabriel had revenues of $106 million with an adjusted EBITDA of $23 million. This yields an 11x EBITDA valuation multiple and, according to Huntsman, an 8x valuation multiple of pro forma adjusted EBITDA including expected synergies.

“We are proud to have partnered with Seth and the Gabriel team in creating a leading platform serving the coatings, adhesives, and composites markets,” said Don Bramley, a managing director at Audax. “The company expanded its proprietary products organically and through acquisitions while investing in its direct commercial team, research & development capabilities, manufacturing facilities, and key talent to support and sustain continued growth. We wish continued success for Seth and the entire Gabriel organization as they embark on their next chapter of growth.”

Huntsman has been actively pursuing transactions in 2020. In May, Huntsman acquired CVC Thermoset Specialties, a maker of specialty additives and epoxy curing agents with two manufacturing facilities in Ohio and New Jersey, for $300 million in cash from Emerald Performance Materials, a portfolio company of American Securities. CVC had revenues of $115 million in 2019 and the $300 million purchase price was equal to an adjusted EBITDA multiple of 10x, or 7x if expected operating synergies are included.

Huntsman (NYSE: HUN) is a manufacturer and marketer of a range of chemical products with 2019 revenues of approximately $7 billion. The company has more than 70 manufacturing, R&D and operations facilities in 30 countries and employs more than 9,000. Huntsman is headquartered north of Houston in The Woodlands, Texas and has executive offices in Salt Lake City, Utah.

“The acquisition of Gabriel broadens the offering in our specialty portfolio and is complementary to our recent acquisition of CVC,” said Scott Wright, the president of Huntsman’s advanced materials division. “Gabriel makes highly specialized toughening and curing agents and other additives used in a wide range of composite, adhesive and coatings applications. We expect that the Gabriel business will strengthen our North America footprint and provide significant commercial synergies.”

Audax invests in middle-market companies that have from $8 million to $50 million in EBITDA and enterprise values of $50 million to $400 million. Sectors of interest include business and consumer services; energy; healthcare; technology, media and telecom; and industrials including chemicals, infrastructure, and building materials. Audax has offices in Boston, New York, and San Francisco

Grace Matthews was the financial advisor to Gabriel on this transaction.

© 2021 Private Equity Professional | January 20, 2021

American Securities Acquires Prince

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Prince International Corporation and Prince Erachem International Corporation (together Prince) have been acquired by American Securities from Palladium Equity Partners.

Prince is a manufacturer of mineral-based specialty additives and has been a portfolio company of Palladium since 2003. The company serves a range of consumer and industrial end markets and many of the company’s products are custom developed for specific customer applications in construction, electronics, consumer products, agriculture, battery, automotive, oil & gas, and heavy equipment.

Prince was founded in 1858 by Robert Prince as a supplier of colorants and additives to the North American brick industry. Today the company operates 25 processing facilities located across North America, South America, Europe, Asia, Australia and Africa. Prince, led by Chairman and President Willson Ropp and Executive Vice President Anthony Weiss, is headquartered in Houston (www.princecorp.com).

During Palladium’s term of ownership, the company transformed from a small, regional processor of minerals to become one of the largest global manufacturers of specialty mineral additives and inorganic chemicals. The company is a proven consolidator, having closed 19 add-on acquisitions since 2003, and has built a multinational manufacturing presence with locations across six continents.

“We are very proud of the results that have been achieved at Prince,” said Adam Shebitz, Managing Director of Palladium. “Willson Ropp and Anthony Weiss have been outstanding partners throughout our ownership period, and have grown the business into a truly world-class enterprise that we believe is well positioned for its next chapter of growth.”

Palladium invests from $50 million to $150 million of equity in companies that have $10 million to $75 million of EBITDA.  Sectors of interest include consumer and food, business and financial services, industrials, and healthcare. Palladium has a focus on companies that operate in the US Hispanic market.  Since its founding in 1997, Palladium has invested over $1.9 billion of capital in more than 30 platform investments and completed over 100 add-on acquisitions. The firm is based in New York (www.palladiumequity.com).

“Prince has grown into a preeminent specialty inorganic chemical manufacturing business across targeted industries based on customer support, technical expertise, and continual improvement of our facilities and capabilities,” said Mr. Ropp. “Our ability to develop and manufacture niche industrial additives and chemicals is valued by our more than 2,000 customers worldwide. Palladium has served as an outstanding partner over the past 14 years, working with us step-by-step and facilitating the creation of our scaled, global platform. We look forward to working with American Securities, leveraging their significant industry expertise and investment experience to accelerate our business plan and growth.”

American Securities invests in businesses with $200 million to $2 billion of revenue and $50 million to $250 million of EBITDA.  Sectors of interest include industrial manufacturing, specialty chemicals, aerospace and defense, energy, business services, healthcare, media, restaurants, and consumer products. The firm has more than $23 billion of capital under management and has offices in New York and Shanghai (www.american-securities.com).

“We are pleased to partner with Willson and the rest of the Prince leadership team to continue to capture attractive growth opportunities,” said Scott Wolff, a Managing Director of American Securities. “The company’s highly-engineered products, valuable customer relationships, experienced leadership team, and engaged employee base make Prince a strong fit for our investment strategy.”

Goldman Sachs & Co. was the financial advisor to Prince on this transaction.

© 2018 Private Equity Professional | March 30, 2018