specialty coatings

Arsenal Closes Four Add-ons, Names New Platform CEO

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 Seal For Life, a portfolio company of Arsenal Capital Partners, has completed the add-on acquisitions of Flame Control Coatings, Highland International, LifeLast, and US Coatings.

Arsenal acquired Seal For Life (SFL) in July 2019 from publicly traded Berry Global Group for $328 million. At that time, Arsenal announced that SFL would serve as a platform investment in the coatings sector focused on the infrastructure and industrial markets.

SFL provides corrosion prevention, waterproofing, and insulation products that prolong the life and durability of water and oil pipelines, tanks and terminals, power generation and petrochemical infrastructure. The company’s products include plastic meshes to protect pipes and pipelines from rocks when backfilled; cathodic protection products; visco-elastic coatings to protect assets from corrosion and water ingress; cold-applied and fused tape products; single wrap pipeline coating systems; and liquid coating products. SFL products are sold under the company-owned brand names Anodeflex, Stopaq, Polyken, Covalence, and Powercrete.

Belgium-headquartered SFL, with annual sales of approximately $120 million, has operations in the Netherlands, Belgium, India, Mexico, and the United States, with over 380 employees.

With the add-on acquisitions of Flame Control Coatings, LifeLast, US Coatings, and Highland International, SFL broadens its portfolio of protective coating technologies, expands its range of applications, and grows its presence in North America:

Flame Control Coatings is a Niagara Falls, New York-based manufacturer of flame retardant and heat resistant specialty coatings sold under the Flame Control and TemperKote brands;

LifeLast is a Pflugerville, Texas-based manufacturer of polyurethane protective linings and coatings that are used in water, wastewater, OEM, and industrial applications;

US Coatings is a St. Louis, Missouri-based manufacturer of corrosion prevention and heat resistant coatings used in oil & gas, mining, rail and industrial applications; and

Highland International is a Boone, North Carolina-based formulator of heat resistant and corrosion protection coatings with expertise in high-temperature coatings;

“These four acquisitions add unique liquid coating technologies that are complementary to our existing portfolio of products and enable SFL to be a one-stop solution to our customers,” said Dirk Totte, president of SFL. “This an exciting milestone for the company and its employees.”

With the closings of the four add-on acquisitions, Arsenal has named Jeff Oravitz as SFL’s new chief executive officer. For almost 11 years Mr. Oravitz was with MetoKote, most recently as president, which was acquired by PPG Industries in June 2016 from Platinum Equity. Lima, OH-based MetoKote applies coatings to customers’ manufactured parts and assembled products. It operates on-site coatings services within several customer manufacturing locations, as well as at regional service centers, located throughout the US, Canada, Mexico, the UK, Germany, Hungary and the Czech Republic.  MetoKote grew to nearly $200 million in global revenue and more than 1,500 employees across 29 facilities under Mr. Oravitz’s leadership. In September 2017, Mr. Oravitz led PPG’s acquisition of The Crown Group, a Warren, MI-based provider of coating services, from High Road Capital Partners. In total, Mr. Oravitz has nearly 30 years of specialty chemicals experience.

“Jeff is a natural fit for SFL given his relevant background in the industrial coatings sector,” said Sal Gagliardo, an operating partner of Arsenal. “With Jeff’s leadership, SFL will continue to add critical solutions and technologies that address the growing market needs for infrastructure maintenance and protection.”

Arsenal invests in middle-market specialty industrial and healthcare companies that have $100 million to $500 million in enterprise value. The firm has offices in New York and Shanghai.

© 2020 Private Equity Professional | January 8, 2020

Arsenal Forms New Coatings Platform

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Arsenal Capital Partners has acquired Seal For Life Industries from publicly traded Berry Global Group for $328 million.

Seal For Life (SFL) provides corrosion prevention, waterproofing, and insulation products that prolong the life and durability of water and oil pipelines, tanks and terminals, power generation and petrochemical infrastructure.

The company’s products include plastic meshes to protect pipes and pipelines from rocks when backfilled; cathodic protection products; visco-elastic coatings to protect assets from corrosion and water ingress; cold-applied and fused tape products; single wrap pipeline coating systems; and liquid coating products. SFL products are sold under the company-owned brand names Anodeflex, Stopaq, Polyken, Covalence, and Powercrete.

SFL, with annual sales of approximately $120 million, has operations in the Netherlands, Belgium, India, Mexico, and the United States, with over 380 employees (www.sealforlife.com).

According to Arsenal, SFL will serve as a new platform investment in the coatings sector focused on the infrastructure and industrial markets. “SFL has an excellent market reputation for providing its customers with the highest level of performance and quality to meet stringent regulatory requirements,” said Sal Gagliardo, an operating partner of Arsenal. “The company continues to innovate protective and anti-corrosion solutions that are solving the market needs in the oil and water pipeline industry and in emerging applications for other core infrastructure markets.  We expect to build on the company’s leading market brands and accelerate the trajectory of new technologies and solutions.”

Arsenal invests in middle-market specialty industrial and healthcare companies that have from $100 million to $500 million in enterprise value. The firm has offices in New York and Shanghai (www.arsenalcapital.com).

“SFL will benefit from Arsenal’s resources and expertise in the coatings and materials sector, where we have strong relevance in the company’s markets and technologies.  We look forward to supporting the SFL team and building the business organically and with strategic acquisitions that will further expand its position in the broader coatings protection industry,” said Roy Seroussi, an investment partner of Arsenal.

“We are excited to partner with Arsenal given its deep expertise in the coating and sealants sector,” said Dirk Totte, general manager of SFL. “Our strong platform combined with strategic investments and acquisitions will accelerate growth in current and new end markets such as renewable energy, infrastructure and commercial buildings.”

Berry Global Group, the seller of SFL, is a Fortune 500 manufacturer and marketer of plastic packaging products. The company is headquartered in Evansville, IN and has over 290 worldwide facilities and more than 48,000 employees (www.berryglobal.com).

J.P. Morgan Securities was the financial advisor to Berry and William Blair & Company advised Arsenal.

© 2019 Private Equity Professional | July 30, 2019

Vance Street Buys Applied Plastics

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Vance Street Capital has acquired Applied Plastics, a provider of specialty coatings used in the medical device industry.

Applied Plastics specializes in the application of polytetrafluoroethylene (PTFE) on wires and other metal-based components that are used in the medical device industry with a primary emphasis on the catheter market. The company applies its specialty coatings using several methods including electrostatic spraying, electrostatic fluidized bed, conventional powder and liquid spraying, and other proprietary techniques.

Customers of Applied Plastics include medical device OEMs and contract manufacturers. The company was founded in 1953 and is headquartered in Norwood, MA (www.appliedplastics.com).

Applied Plastics is led by CEO Dave Ring who is investing alongside Vance Street in this transaction and has retained a material ownership position in the company. “We are excited to partner with Vance Street as we look toward our next chapter of growth,” said Mr. Ring.  “Vance Street’s highly relevant investing and operating experience in the medical manufacturing space made them the ideal partner to help Applied execute on the exciting growth we see across our customer base.”

“Dave Ring has built an industry leading and highly differentiated business that is well positioned across the fastest growing medical end markets,” said Brian Martin, a managing partner at Vance Street. “We’re excited to support the Applied team during this next chapter of growth.”

The acquisition of Applied Plastics is Vance Street’s sixth investment out of Vance Street Capital II LP and is its fourth investment in the medical space in the past three years. The firm’s other Fund II medical investments include Motion Dynamics, a manufacturer of wire-based micro-components and sub-assemblies found in micro-catheters (acquired in September 2016); A&E Medical, a medical device OEM focused on single-use products used in cardiovascular procedures (acquired in February 2016); and Adam Spence Vascular Solutions, a designer and manufacturer of high pressure braided tubing and extrusions for the cardiovascular end markets (acquired in September 2017 and exited in May 2018).

“Applied Plastics is an ideal opportunity for Vance Street to leverage our operating experience and network within medical manufacturing to continue to build on the world-class and highly-proprietary coatings capabilities Applied has built over the past 25 years,” said Mike Janish, a managing partner at Vance Street.

Vance Street makes control investments in companies with enterprise values of $30 million to $250 million and EBITDA of $3 million to $25 million. Sectors of interest include aerospace, defense, industrial, and medical. The firm is based in Los Angeles (www.vancestreetcapital.com).

Senior debt for this transaction was provided by BMO Sponsor Finance and Neuberger Berman. Raymond James was the financial advisor to Applied Plastics.

© 2019 Private Equity Professional | February 1, 2019

High Road Closes 50th Transaction

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U-C Coatings, a portfolio company of High Road Capital Partners, has acquired Contechem. This acquisition marks High Road’s 50th transaction since its founding in 2007.

In January 2018, High Road acquired U-C Coatings, a manufacturer and distributor of specialty coatings and sealants used in the North American wood and lumber markets, from Argosy Private Equity and Sidereal Capital Group.

U-C Coatings’ wood protection products and end paints are used to conserve and protect hardwood logs and lumber. The company’s products includes ANCHORSEAL which is used to prevent logs and lumber from prematurely drying and cracking; GEMPAINT lumber tagging paints are used to differentiate lumber bundles; and SEAL-ONCE water-proofers create a protective water barrier within wood, concrete and masonry. The company was founded in 1971 and is headquartered in Buffalo, NY (www.uccoatings.com).

Like U-C Coatings, Contechem is also a manufacturer of wood protection products for freshly cut lumber and logs. The company’s Britewood anti-stain products inhibit mold growth and discoloration on wood and lumber, and the company’s proprietary application equipment is used to reduce product waste and improve worker safety. All of Contechem’s manufacturing is carried out in compliance with environmental regulations and the company operates on a zero-discharge basis to prevent release of toxic or hazardous materials. Contechem, led by President Kip Anderson, was founded in 1985 and is headquartered in a 21,000 square foot facility in the Portland suburb of St. Johns, OR (www.contechem.com).

Mr. Anderson and his brother, Steve Anderson, will continue to lead Contechem post-closing. The two invested in the transaction alongside High Road and U-C management. Both companies will continue operations at their manufacturing facilities in Buffalo and Portland.

“Contechem has a superior line of products and provides outstanding levels of customer support,” said Tom Johel, CEO of U-C Coatings. “Its ability to develop and manufacture custom blends for a mill’s wood and climate conditions makes it a natural partner for U-C Coatings, and both companies’ products provide exceptional cost savings and return on investment. With tight margins in the lumber industry, we believe we can have a positive impact on our customers’ bottom lines.”

“Joining Contechem’s innovative sapstain products with U-C Coatings’ industry-leading wood sealants and end paints provides an ideal cross-selling opportunity and one-stop shop package to customers,” said Jeffrey Goodrich, a Partner at High Road. “We continue to seek strategic opportunities to build the U-C platform.”

High Road invests in manufacturing, service, or value-added distribution businesses with revenues of $10 million to $100 million and EBITDAs of $3 million to $10 million.  The firm has completed 50 transactions – 18 platform investments, 25 add-on acquisitions and 7 exits – since its founding in 2007.  High Road is based in New York (www.highroadcap.com).

Mr. Goodrich led the transaction for High Road and was assisted by Eojin Lee, Vice President; James Karle, Senior Associate; and Marc Rosenberg, Associate.

Madison Capital provided financing for this transaction.

© 2018 Private Equity Professional | September 13, 2018

Tonka Bay Adds to The Sierra Company

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The Sierra Company, a portfolio company of Tonka Bay Equity Partners since May 2015, has acquired the assets of Burke Industrial Coatings.

Burke is a maker of liquid stainless steel and antimicrobial industrial coatings. The company’s flagship products are stainless steel finishes that are heavily pigmented with stainless steel flakes to provide corrosion resistance and long-term durability even under extreme exposures. The company’s coatings provide resistance to general weather, coastal environments, chemical fumes, spillage and abrasion.

Burke’s specialty antimicrobial coatings are used in a range of applications in the food and beverage, HVAC, travel and medical sectors. Company-owned brand names include Superlife, Steel Tuff, Steel Plus, Supertemp and Silverbullet. Burke was founded in 1984 and is headquartered just north of Portland in Ridgefield, WA (www.burkeindustrialcoatings.com).

“Burke has some unique technology that complements our specialty coatings product line and expands our product offerings within the high-performance coatings market for industrial and OEM applications,” said Ray Torres, CEO of Sierra.

The Sierra Company manufactures industrial coatings and specialty concrete treatments, sealants and coatings that are used in commercial construction, residential construction and government infrastructure. The company is headquartered near Minneapolis in Minnetonka, MN (www.sierrapaint.com).

In October 2017, Sierra completed the add-on acquisition of Dade City, FL-based SureCrete Design Products, a manufacturer of decorative and specialty concrete products that are used to resurface floors, walls, ceilings, countertops, and structural castings (www.surecretedesign.com).

Tonka Bay invests in manufacturing, value-added distribution and business services companies that have EBITDAs greater than $2 million. The firm is based in the Minneapolis suburb of Minnetonka (www.tonkabayequity.com).

© 2018 Private Equity Professional | January 30, 2018

Audax Buys Master Coating Technologies

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Innovative Chemical Products, a portfolio company of Audax Private Equity, has acquired Master Coating Technologies (MCT), a manufacturer of specialty architectural coatings.

MCT’s family of five architectural coatings brands includes Scuffmaster Paint, Zolatone Interior Finishes, and MDC (all specialty paints); ClearErase (a clear dry erase coating); and Bellagard (sculpted wall panel systems). The company was founded in 1995 and is headquartered in Eagan, MN (www.mastercoating.com).

“Master Coating Technologies is among the top five manufacturers of specialty coatings. They have been on our radar for quite some time now. We’re thrilled to have their brilliant people – and technology – as a new resource to further cement our company’s reputation as an innovative leader,” said Doug Mattscheck, CEO of Innovative Chemical Products.

Innovative Chemical Products (ICP) was formed in January 2016 when Audax combined two of its specialty chemical portfolio companies, California Products (acquired from Delos Capital in October 2015) and Nicoat (acquired in March 2015 from Caltius Equity Partners). Today, ICP is a specialty chemical company engaged in the formulation, manufacturing, and marketing of coatings, adhesives, sealants and elastomers (CASE). ICP operates through three divisions: construction, adhesives & sealants, and industrial. The company sells its products to multiple end markets including OEM, industrial, building materials, packaging, printing, specialty construction, and sports surfaces. ICP has warehousing and manufacturing facilities near Chicago in Itasca, IL; a manufacturing facility southwest of Akron in Norton, OH; and is headquartered near Boston in Andover, MA (www.icpgroup.com).

The operations of Master Coating Technologies will be housed within the construction division of ICP which includes market-leading brands California Paints, FixALL, Storm System, Fiberlock, Dry-Treat, California Sports Surfaces, and Rock-Tred (www.icp-construction.com). The construction division is led by President Zain Mahmood.

Audax Group makes control investments of $10 million to $100 million in middle market companies with transaction values of $25 million to $500 million. Sectors of interest include industrial manufacturing; energy; outsourced industrial services; consumer products; healthcare devices and services; non-asset based logistics; technology; aerospace & defense; business services; and direct marketing. The firm was founded in 1999 and has offices in Boston, New York and Menlo Park (www.audaxgroup.com).

© 2017 Private Equity Professional | November 8, 2017