Dec 15 2010
Arsenal Capital Partners, a leading New York-based private equity firm that invests in middle-market specialty industrial, healthcare, and financial services companies, today announced the acquisition of Para-Chem Southern ("Para-Chem"), a leading provider of specialty adhesives, coatings and polymers.
Concurrent with the transaction, Para-Chem will be merged with Arsenal's platform investment, Royal Adhesives and Sealants, LLC announced two weeks ago.
Headquartered in Simpsonville, South Carolina, Para-Chem offers specialty adhesives, coatings, polymers, surfactants and thickeners, across a diverse range of markets in North America including carpeting, personal care, household, institutional and industrial, graphic arts, construction, specialty textiles, paper, packaging, and military. The company specializes in custom formulations offering flexible production, applications development, technical support and excellent service.
John Televantos, a Partner at Arsenal Capital said, "Para-Chem has a long history of innovation providing great solutions and service to its diverse customers. The acquisition of Para-Chem and merger with Royal represents an important milestone in our strategy to further build a leading adhesives, sealants and coatings business offering customized and proprietary solutions."
Tim Zappala, also a Partner at Arsenal added, "We look forward to partnering with the management and employees of both companies to expand the platform through organic growth initiatives, global expansion and further acquisitions."
Ted Clark, Chief Executive Officer of Royal, said, "The acquisition of Para-Chem strengthens Royal's technical expertise and approach of providing customers with specialty formulated products. Royal's experienced management team will partner with Para-Chem to accelerate global growth and expand the platform into new technologies and geographies. We are excited about Arsenal's backing and are confident that their experienced team will serve as exceptional partners to Royal."
Bill Ward, Chief Operating Officer of Para-Chem, and now President of Royal, said, "We are delighted to become an integral part of Royal Adhesives and Sealants. Para-Chem's technical capabilities will enhance Royal's customized product offerings and together, we believe this positions the newly combined company to better address customer demands for flexible, high performance and quality products."
Arsenal executives, John Televantos, Tim Zappala, and Sal Guccione, will serve on the Board of Directors of Royal.
Arsenal acquired Royal Adhesives on November 29, its sixth investment in 2010, to create an Adhesives Sealants and Coatings platform, and this transaction represents Arsenal's continued strong focus in the specialty industrials sector. Arsenal's current investments in the specialty industrials sector include Velsicol Chemical, a manufacturer of high performance chemicals used in agriculture and industrial applications, and Novolyte Technologies, a manufacturer of specialty electrolyte materials for lithium ion battery and energy storage applications and a variety of other technically demanding custom manufactured products for the electronics, pharmaceutical and industrial markets. Earlier this year, Arsenal sold Genovique Specialties Corporation to Eastman Chemical Corporation and IDQ to Castle Harlan, in transactions which returned in excess of 12.0x and 8.0x invested capital to investors, respectively.
Equity financing for the transaction was provided from Arsenal Capital Partners' $500 million Fund II. Debt financing was provided by Madison Capital Funding LLC, LBC Credit Partners, Inc., and Prospect Capital Corporation. Brookwood Associates was the exclusive financial advisor to Para-Chem. Proskauer Rose LLP was legal advisor to Arsenal Capital.