Grace Matthews
Chemical & Materials Overview
Grace Matthews Chemicals Practice Overview
Internationally Recognized Chemicals Transaction Advisors
Services
 Strong, experienced and well-respected chemicals focused transaction advisors
 Business sales – strategic and private equity
 National presence with global reach
 Corporate divestitures
 Founded in 1999
 Recapitalizations and management buy-outs
 Sixteen employees
 Going-private transactions
 Ten professionals dedicated to our chemicals practice
 Acquisitions
 Collectively, our chemicals professionals have:
 Capital raises
 Completed over 100 chemicals assignments
 Fairness opinions and valuations
 Over 150 years in chemicals M&A, finance, production, engineering and
executive management positions
 Strategic alternatives analysis
Typical Engagements
Transaction Breakdown
 Clients include privately-held businesses, private equity funds, and large,
multi-national corporations
Buy-Side
20%
 End-to-end transaction advisory services
 Typical transaction sizes range from $20 to $500 million
Sell-Side
65%
Recapitalizations / Other
10%
Fairness Opinions/
Strategic Alternatives
5%
2
Transactional Capabilities
Sell-side
Strategic vs. Financial Buyers
 Client profiles
 80% of GM sell-side clients were acquired by strategic buyers
 High quality public and privately-held companies
 Global 2000 corporate divestitures
Private Equity
20%
 Private equity portfolio companies
 Process types
 Limited, confidential strategic sales (1-6 strategic buyers)
 Transitional auctions
Strategic
80%
 Broad auctions
 Recapitalizations
 Management buy-outs
 Special situations
Buy-side
Global Access to Strategic Buyers and Financing Sources
 Client profiles
 Track record of high level access to global strategic buyers
 Large multinational corporations
 Incumbent management with active MBO opportunity
 Process types
 Exclusive, focused searches in specific industry sectors
 Single target engagements
 Broad scope searches with multi-year engagement resulting in
multiple acquisitions
 One-third of transactions are cross-border
 Long-term relationships with hundreds of leading private equity firms and
private investors
 Extensive relationships with a variety of financing sources
 Banks
 Private Equity
 Alternative Sources
3
Established Relationships with Industry Leaders
 GM principals have completed assignments with all below
 Also, direct ties to hundreds of other global and regional chemical companies
4
Established Relationships with Private Equity Groups
 GM principals have completed assignments with all below

Strong relationships with chemicals and materials focused private equity groups

Regular attendees of ACG Intergrowth & Capital Connect Events
5
Dedication to Specialty Chemicals
Chemical Whitepaper Published Annually
Deep Industry Expertise
 Over 100 chemicals assignments completed in the sectors below
 Experience across virtually the entire spectrum of specialty chemicals
Oil & Gas
Process
Chemicals
Agricultural
Chemicals
Paints,
Industrial
Coatings & Inks
Food
Ingredients
Fine &
Organic
Chemicals
Personal Care,
Soaps &
Cleaners
Chemicals &
Materials
Inorganics,
Ceramics &
Catalysts
Adhesives,
Sealants &
Tapes
Plastics,
Polymers &
Resins
Colorants &
Additives
Contract
Packaging
Construction
Materials
Industry Associations
Regular Speaking Engagements at Chemicals Events
 American Coatings Association, April 2015 “M&A’s Changing Landscape: Chemicals, Coatings,
and Distribution”
 Danish-American Business Forum, January 2015 “Update on the U.S. M&A Market Activity”
 Adhesives and Sealants Council Spring Convention, April 2014 “M&A in Adhesives & Sealants:
Private Equity vs Strategic Buyers”
 American Coatings Association, October 2013 “M&A in Specialty Chemicals & Coatings:
Innovation, Consolidation, and Playing Well with Others”
 Adhesives and Sealants Council Leadership Conference, June 2013 “Value Creation in Specialty
Chemical Mergers and Acquisitions”
6
Global Reach
Global Capabilities
Multinational Client Base and Relationships
 Nearly all of our sell-side processes include potential non-U.S. buyers
 Strong relationships with key global chemical and materials companies
 We cultivate direct ties to senior management around the world, who respect
us for our industry expertise and deal flow. They also often hire us for their
divestitures.
 Recent multinational clients include the following:
 GM principals visit European clients on a regular basis (typically monthly)
 Approximately 70% of our deals in the last three years involved significant
interaction with global, non-U.S. strategic buyers
 Approximately one-third of our deals in the last three years were cross-border
7
Grace Matthews Chemicals Team
John Beagle | Co-founder, Managing Director
Doug Mitman | Co-founder, Managing Director
Kevin Yttre | Managing Director
Chemical Team Lead
Former Trader for Fidelity Investments and Market Maker
at the American Stock Exchange in New York
Formerly with ICI’s Uniqema specialty chemicals business
in U.S. and The Netherlands
MBA from Cornell University and BA from Dartmouth
College
MBA from Harvard, B.S. in Chemical Engineering from
University of Wisconsin-Madison
25+ years relevant experience
10+ years relevant experience
Former research engineer at Digital Equipment Corporation
MBA from Cornell University, B.S. in Materials Science from
Cornell University
25+ years relevant experience
Ben Scharff | Managing Director
Thomas Osborne | Senior Advisor
Trent Myers | Vice President
Advises clients in chemicals, paints and coatings, construction
products and services, and general manufacturing sectors
Former CEO of both The Tnemec Company and ICI Paints
North America / The Glidden Company
Served as monthly columnist for Adhesives Age and
Modern Paint and Coatings
BS from University of Wisconsin-Madison and previously
served in the United States Marine Corps
BS from Youngstown State University, and has completed
the Advanced Management Program at Harvard Business
School
MBA from University of Wisconsin, MA from the University
of Virginia, BA from the University of Georgia
20+ years relevant experience
25+ years relevant experience
30+ years relevant experience
Andy Hinz | Vice President
Andrew Cardona | Associate
Patrick Maag | Analyst
Former Equity Research Analyst at Robert W. Baird & Co.
Former Investment Associate at Prudential Capital
Group, working in both the international group and the
restructuring group
Supports clients in a variety of chemical and materials
industries
MBA from Northwestern University and BBA from
University of Wisconsin-Eau Claire; holds the CFA
designation
BBA from the University of Wisconsin-Madison
10+ years relevant experience
6 years relevant experience
George Yang Liu | Analyst
Sarah Toledano| Analyst
Supports clients in a variety of chemical and materials
industries
Supports clients in a variety of chemical and materials
industries
BA in Economics from Northwestern University
BS in Chemistry from Massachusetts Institute of
Technology (MIT)
Joined Grace Matthews in 2014
BS in Finance from Marquette University
2 years relevant experience
Joined Grace Matthews in 2015
8
Grace Matthews: Chemical Team Leaders
Douglas Mitman
John Beagle
John Beagle, Managing Director, is a co-founder of Grace Matthews and has
advised clients on mergers and acquisitions since 1991. John has been the
lead investment banker on over 100 engagements in a variety of industries
including chemicals, coatings and basic materials, as well as in other
manufacturing and service industries.
Prior to his investment banking career, John was a research engineer at
Digital Equipment Corporation, where he was part of the team that
developed the patented Alpha chip technology – at the time, the fastest
commercial microprocessor ever engineered. John has a B.S. in Materials
Science from Cornell University, and an M.B.A. from the Johnson Graduate
School of Management, Cornell University.
Kevin Yttre
Douglas Mitman, Managing Director, is a co-founder of Grace Matthews
and has worked in mergers, acquisitions, and capital fundraising since 1993.
Doug has completed over 50 transactions ranging in value from $5 million
to $500 million, and has sat on the board of several privately-held
companies.
Prior to forming Grace Matthews, Doug ran an investment banking office in
Prague, Czech Republic, and worked as a Trader for Fidelity Investments in
Boston and as a Market Maker at the American Stock Exchange in New
York. Doug has a B.A. in Economics from Dartmouth College and his M.B.A.,
with Highest Distinction, from the Johnson School of Management at
Cornell University.
Benjamin Scharff
Kevin Yttre, Managing Director, has worked with clients in a variety of
industries including specialty chemicals, commodity chemicals, coatings, and
materials. A chemical engineer, Kevin held a number of engineering and
management positions with ICI’s Uniqema specialty chemicals business in the
U.S. and The Netherlands.
Benjamin Scharff, Managing Director, focuses on mergers and acquisitions,
leveraged transactions and recapitalizations. Over the course of his
investment banking career, Ben has advised clients in a broad range of
industries, including chemicals, paints and coatings, construction products
and services, and general manufacturing.
Kevin holds a M.B.A. from Harvard Business School and a B.S. degree, with
Highest Distinction, in Chemical Engineering from the University of Wisconsin
– Madison. At the University of Wisconsin, Kevin was awarded the Kurt F.
Wendt Memorial Scholarship for outstanding academic performance and the
Kowalke-Harr Teamwork Award, and was also named a Dalhke Scholar and
Colbeck Scholar.
Ben graduated from the University of Wisconsin with a B.S. degree in
Economics. Ben is a member of the Association for Corporate Growth
(Wisconsin Chapter) and previously served in the United States Marine Corps.
9
Grace Matthews Chemicals Team
Thomas Osborne
Andrew Hinz
Thomas Osborne focuses on new business development and strategic
planning for Grace Matthews. Prior to joining Grace Matthews, Tom held a
variety of senior leadership positions in the global chemical industry, including
CEO of both The Tnemec Company and ICI Paints North America / The
Glidden Company.
Tom served as Board Chairman of the National Paint and Coatings Association
from 2003 to 2005 and received the Association’s highest honor, the George
Baugh Heckel award. Tom holds a B.S. from Youngstown State University, and
has completed the Advanced Management Program at Harvard Business
School.
Trent Myers
Andrew Hinz, Director, joined Grace Matthews in 2007 and specializes in
buy- and sell-side transactions and leveraged finance. Andy has experience
in a variety of industries including chemicals, basic materials, coatings and
adhesives, printing, and industrial equipment and services. Prior to joining
Grace Matthews, Andy was an Equity Research Analyst with Robert W. Baird
& Co. in Milwaukee, Wisconsin. At Baird, Andy provided investment
recommendations to support institutional equity investors.
Andy holds the Chartered Financial Analyst (CFA) designation and received a
B.B.A. from the University of Wisconsin - Eau Claire with an emphasis in
Accounting and Finance and an M.B.A. from the Kellogg School of
Management at Northwestern University.
Andrew Cardona
Trent Myers, Vice President, has over 20 years experience working in
mergers, acquisitions, and leveraged transactions. Trent has been involved
in over 100 transactions throughout his career, involving such industries as
chemicals, coatings and adhesives, basic materials, and a variety of other
manufacturing and service industries.
Trent has served as a monthly columnist on economic and M&A issues for
Adhesives Age and Modern Paint and Coatings magazines. Trent holds an
M.B.A. degree, with an emphasis in Finance, from the University of
Wisconsin, an M.A. from the University of Virginia, and a B.A. from the
University of Georgia.
Andrew Cardona, Associate, joined Grace Matthews in 2013, and assists in
buy-side and sell-side transactions, supporting clients in a variety of industries
including chemicals, food ingredients, retail, energy, and automotive.
Previously, Andrew was an Investment Associate at Prudential Capital Group
in Chicago. During his time at Prudential, Andrew worked in both the
international group, investing in companies based in Mediterranean Europe,
Latin America and Australia, as well as the restructuring group, managing
troubled investments and investing in distressed securities.
Andrew received a B.B.A. from the University of Wisconsin-Madison, with an
emphasis in finance and investment banking. At Madison, Andrew received
the UW Student-Athlete Academic Excellence Award and the Arthur Ashe Jr.
Award, a National Academic Award for Scholar Athletes.
10
Grace Matthews Chemicals Team
Patrick Maag
George Yang Liu
Patrick Maag, Analyst, joined Grace Matthews in 2013. Patrick supports
clients in a variety of chemical and materials industries. Patrick holds a BS in
Finance from Marquette University where he was a member of the Applied
Investment Management Fund, which teaches fundamental analysis through
direct investment of university funds.
George Yang Liu, Analyst, joined Grace Matthews in 2014. George
supports clients in a variety of chemical and materials industries. George
holds a BA in Economics from Northwestern University. George also
studied Chinese Political and Economic Development at Peking University
in Beijing, China.
Sarah Toledano
Sarah Toledano, Analyst, joined Grace Matthews in 2015. Sarah supports
clients in a variety of chemical and materials industries. Sarah holds a B.S. in
Chemistry from the Massachusetts Institute of Technology (MIT), with
extensive coursework in finance and accounting through the Sloan School of
Management. Sarah also participated in the Ruhr Fellowship in NordrheinWestfalen, Germany, with a focus on global fuels technology.
11
Grace Matthews Recent
Chemical Industry Transactions
Select Chemical Industry Transactions
has been recapitalized by
has been acquired by
has acquired select assets of
the Capcure® business from
has been acquired by
has sold certain assets to
has been recapitalized
by a confidential
private equity group
Grace Matthews, Inc. advised
W.F. Taylor Co.
Grace Matthews, Inc. advised
Compass Chemical International
Grace Matthews, Inc. advised
Jones-Blair Company
Grace Matthews, Inc. advised
Polytex Environmental Inks
Grace Matthews, Inc. advised
Gabriel Performance Products
Grace Matthews, Inc. advised
Spraylat Corporation
has sold its portfolio company
a wholly owned subsidiary of
has acquired
has been acquired by
to Management and
Syrgis Performance
Products, LLC
has sold its portfolio company
has acquired the assets of
has been acquired by
Grace Matthews, Inc. advised
Eastman Chemical Company
Grace Matthews, Inc. advised
Silbond Holdings, LLC
Grace Matthews, Inc. advised
Superior Capital Partners and
Edge Adhesives
Grace Matthews, Inc. advised
Syrgis Performance Products
to
Grace Matthews, Inc. advised
Equa-Chlor, Inc.
Grace Matthews, Inc. advised
Audax Group
13
Select Chemical Industry Transactions
a wholly owned subsidiary of
Syrgis Performance Products
has been acquired by
American Sugar Refining Inc.
has acquired
has acquired the
Specialty Sweetener Division
assets of
has sold its
Resilient Floor Coatings
Business to
has sold its portfolio company
has acquired
to
from
Grace Matthews, Inc. advised
Syrgis Performance Products
Grace Matthews, Inc. advised Chr. Hansen
Grace Matthews, Inc. advised
Landec Corporation
Grace Matthews, Inc. advised
LORD Corporation
Grace Matthews, Inc. advised
NorthStar Chemicals, Inc.
a wholly owned subsidiary of
has been recapitalized by
has acquired
Grace Matthews, Inc. advised
Prairie Capital Management, LLC
has acquired
has acquired the assets of
Syrgis Performance Products
has merged with
has been acquired by
Management of Lycus, Ltd.
The Flood Company
Grace Matthews, Inc. advised
Columbia Paint & Coatings
Grace Matthews, Inc. advised
Fasse Paint Company
Grace Matthews, Inc. advised
Syrgis Performance Products
Grace Matthews, Inc. advised
ColorMatrix Corporation.
Grace Matthews, Inc. advised
AkzoNobel
Grace Matthews, Inc. advised
Northwest Coatings, LLC
14
Select Chemical Industry Transactions
has sold its specialty
chemical subsidiary
has sold its portfolio company
to
to
Grace Matthews, Inc. advised
Chr Hansen, Inc.
Grace Matthews, Inc. advised
Landec Corporation
Grace Matthews, Inc. advised
Brockway Moran
has been acquired by
has been acquired by
has sold its U.S. fine chemicals
subsidiary to
Grace Matthews, Inc. advised
the shareholders of CERAC, Inc.
Grace Matthews, Inc. advised
Raabe Corporation
Grace Matthews, Inc. advised
Borregaard Synthesis, Inc.
has acquired the
Excipients Division of
has acquired
has acquired a majority
interest in
has acquired the assets of
Grace Matthews, Inc. advised
AkzoNobel
Grace Matthews, Inc. advised
Vesta, Inc.
Grace Matthews, Inc. advised
Pacific Epoxy Polymers, Inc.
has licensed exclusive fields of
Intelimer technology from
Grace Matthews, Inc. advised
Landec Corporation
Beckers Industrial Coatings
has acquired the stock of
has sold the assets of
Lubrizol Performance Systems
to
Grace Matthews, Inc. advised
Specialty Coatings Company, Inc.
Grace Matthews, Inc. advised
Lubrizol Corporation
15
Recent Transactions Case Studies
Dominus Capital’s Recapitalization of W.F. Taylor Co., Inc.
Overview
Results
W.F. Taylor Co., Inc. (“Taylor” or the “Company”) is a leading North American
manufacturer and marketer of flooring adhesives and related products. The Company
has a reputation for developing high quality, technologically-advanced adhesives and
providing superior customer service. Taylor is a leader in product innovation and
offers a broad range of environmentally-friendly products that are free from
isocyanates, solvents, and other potentially hazardous chemicals.
The process was highly competitive and generated a significant amount of interest
from both strategic and financial buyers. Grace Matthews led discussions with a
variety of potential buyers with interest in formulated chemicals and the flooring
market.
Taylor has been family-owned and operated since John Raidy, Sr. acquired the
business in 1989. Since that time, Taylor has grown into an industry leader with a
reputation for providing high quality and innovative adhesives to installers of floor
coverings throughout the U.S. The Company was owned by six members of the Raidy
family, including Jack Raidy, Jr. and Mike Raidy, the second generation of Raidys to
own and manage the business.
Ultimately, the shareholders elected to partner with Dominus Capital, a New Yorkbased private equity fund that had developed an expertise in the flooring market
through several prior acquisitions. In Taylor, Dominus recognized another opportunity
to leverage its market knowledge and industry contacts with a business that had a
reputation for high quality, technologically-advanced and environmentally-friendly
products. The transaction provided an opportunity for shareholder liquidity while
allowing management, including Jack and Mike Raidy, to retain ownership in the
business. The shareholders also viewed Dominus Capital’s broad network of industry
resources as an asset to support continued growth.
After successfully developing the Taylor brand and expanding into multiple
distribution channels throughout North America, the shareholders decided to seek
partial liquidity for estate planning purposes. The shareholders engaged Grace
Matthews to explore the Company’s options.
Process
Taylor’s niche market position and strong historical growth made the Company an
attractive target for a broad range of both strategic and financial buyers. Given their
extensive historical focus on developing a strong brand presence and creating a
positive corporate culture, the Raidy family was committed to identifying a partner that
would build upon the company’s success and maintain continuity for the operations
and employees.
has been recapitalized by
Grace Matthews, Inc. advised
W.F. Taylor Co., Inc.
17
Jones-Blair’s Sale to Hempel A/S
Overview
Results
Jones-Blair Company (“Jones-Blair” or the “Company”) is a niche market leader in the
development, manufacture, and marketing of industrial (predominantly oil & gas) and
construction coatings (marketed under the NEOGARD brand name). Jones-Blair is well
known in the coatings industry for its technologically-advanced, user-friendly products
and its industry-leading customer service.
The process was highly competitive and generated a significant amount of interest
from strategic buyers. Per Grace Matthews’ recommendation, the shareholders
allowed extensive further diligence, including QoE reports, management meetings and
site visits to multiple interested parties prior to final offers. Albeit time-consuming,
this process allowed the company to choose from a few well-diligenced final offers each with a high probability to close.
Jones-Blair was founded in 1928 and was privately-held by three families who were
not active in the day-to-day operations of the business. The Company was operated
by outside, professional managers that shaped it into two distinct, niche business
units. After realigning the Company and making significant investments in technology
and product development, the managers oversaw a period of strong top- and bottomline growth for Jones-Blair.
Recently, Jones-Blair was approached by several strategic buyers, and the
shareholders engaged Grace Matthews to explore potential strategic options for the
Company.
Ultimately, the shareholders elected to sell the business to Hempel A/S, a Copenhagen,
Denmark-based world-class manufacturer of high performance coatings. Hempel
recognized in Jones-Blair a near perfect strategic fit with its complementary products
and technologies, targeted geographies and key personnel additions. Hempel paid a
full-value for the business, and it provided a positive outcome on all of the ‘softer’
issues that were important to the stakeholders of Jones-Blair. The final outcome
demonstrated that transaction value does not need to be compromised to achieve a
win-win for all parties involved.
Process
Jones-Blair had often received inquiries from both strategic and financial buyers, but
the shareholders had not previously explored a formal sale process. Based on the
shareholders’ desire to maintain continuity for Jones-Blair’s operations and to preserve
confidentiality, Grace Matthews held informal conversations with senior management
of a small group of strategic buyers to describe the opportunity and gauge initial
interest.
One of the challenges of the process was to find a buyer that would place premium
values on both the industrial and the construction coatings operations. Also, as is
common, Jones-Blair had a few unique characteristics that a buyer needed to fully
understand early in the process, to avoid late stage contract issues.
has been acquired by
Grace Matthews, Inc. advised
Jones-Blair Company
18
One Rock Capital Partners’ Acquisition of
Compass Chemical International
Overview
Results
Compass Chemical International LLC (“Compass”) is a leading independent producer of
specialty and standard phosphonates and other specialty chemicals and a major
importer and distributor of phosphorus acid. With operations in Smyrna, Georgia and
Huntsville, Texas, Compass serves a diverse base of oilfield, industrial water and
recreational water customers. Cooperative product development with customers is a
major competitive differentiator for Compass, and has helped the Company build a
robust customer base consisting of industry leading blue-chips as well as small to midsize industrial firms.
Ultimately, the shareholders of BMMC selected One Rock Capital as Compass’
new partner. One Rock recognized that Compass’ market position, strong
management, and industry reputation represented a strong base for future
growth, and was selected based on One Rock partners’ industry knowledge and
relationships, as well as the cultural fit between the parties. The transaction
offered continuity for the existing management team and allowed them to go
forward with an experienced partner committed to executing the Company’s
growth strategy.
Compass was owned by BMMC Holdings, whose shareholders had overseen Compass’
development into an industry leader in phosphonate-based scale and corrosion
inhibitors for oilfield and industrial water applications. Because Compass was one of
few remaining independent mid-sized North American manufacturers focused on these
fast-growing markets, the shareholders of BMMC determined in mid-2014 that the
Company was at an inflection point, and that it was an opportune time to consider
bringing in new investors that could support the company’s future growth prospects.
has made an equity investment in
Process
BMMC’s shareholders engaged Grace Matthews to explore the Company’s options.
Grace Matthews believed that Compass would attract considerable interest from the
investment community. In choosing a potential partner, BMMC shareholders and
Grace Matthews considered several variables, including opportunities for Compass’
talented management team and potential for continued growth.
Grace Matthews, Inc. advised the shareholders of
Compass Chemical International
19
Evonik Industries’ Acquisition of Silbond Corporation
Overview
Results
Silbond Corporation, or “Silbond”, is a leading manufacturer and supplier of tetraethyl
orthosilicate (TEOS), a specialty silicate material. With a history of growth, high
margins, and strong cash flow complemented by a unique, low-cost, highly efficient
manufacturing process, Silbond has established itself as a leader in TEOS-related
products for the consumer electronics and semiconductors, investment casting,
protective paints and coatings, and chemical processing and catalyst industries.
Silbond produces TEOS in a unique and inherently clean direct reaction process that
allows the company to consistently meet the highest requirements for purity. Having
invested significantly in production capabilities and product development over the
past five years, Silbond possessed a number of tangible, material growth
opportunities that positioned the company well for continued success.
Over the course of its long-term engagement with O2 Investment Partners, Grace
Matthews worked to navigate ownership through a series of challenging discussions
with multiple interested parties. With significant expected synergies and
complementary geographic locations and product lines, Evonik Industries successfully
acquired Silbond Corporation in February 2014.
O2 Investment Partners, supported by Centerfield Capital Partners, acquired the
Company along with Silbond’s management team in 2010. After initial meetings in
2012, Silbond Holdings engaged Grace Matthews in a long-term advisory role to help
prepare the company for an eventual sale.
has been acquired by
Process
A number of interested acquirers approached Silbond prior to ownership’s decision to
formally declare the company for sale. As one party emerged as a serious potential
buyer, the shareholders made the decision to ask Grace Matthews to market the
company to an limited group of other strategic and high-potential private equity
acquirers.
Grace Matthews, Inc. advised
Silbond Holdings, LLC on this transaction
20
The Gladstone Companies’ and Akoya Capital’s Acquisition of
Edge Adhesives from Superior Capital Partners
*Winner of the M&A Advisor’s Divestiture of the Year Award for 2014
Overview
Results
Edge Adhesives, or “Edge”, is a developer and manufacturer of adhesives, sealants,
tapes, gaskets, and related materials for the construction, transportation, electrical,
HVAC, and other markets. By combining significant formulation and production
expertise across multiple facilities and technology platforms with the ability to
formulate, compound, extrude, coat, and convert products, Edge developed and
commercialized a number of products that are currently recognized as leaders in their
respective market niches.
The result was a timely, efficient sales process that was quite competitive, and
included numerous interested strategic and private equity groups.
After acquiring the initial platform company in 2010, Superior Capital Partners, the
majority owner of Edge, and Edge’s CEO had successfully integrated a number of
acquisitions and achieved substantial cost savings and organic growth. In the summer
of 2013, ownership began considering potential exit options and ultimately engaged
Grace Matthews to run a sale process targeted at a select group of strategic and
private equity buyers.
In partnership with Akoya Capital, the Gladstone Companies acquired Edge Adhesives
in February 2014. Gladstone and Akoya brought in several key industry executives
early in the process that were able to help them understand the value proposition and
growth opportunities, which allowed them to get comfortable with the ultimate
valuation.
The final value of the transaction matched the high expectations of the sellers, and the
management team of Edge (which included a significant roll from the CEO into Newco)
was very pleased with its new equity partner. This all-around positive outcome
underscores the need for a well-managed and executed sale process.
Process
After working with ownership to position and prepare the company for sale, Grace
Matthews was tasked with finding a group of buyers that would value the business off
of significant, yet defensible, increased future performance. As such, Grace Matthews
leveraged industry relationships to contact the best potential strategic acquirers that
could benefit from Edge’s manufacturing footprint, technology and diverse product
portfolio. Grace Matthews also contacted a number of targeted private equity groups,
interested and familiar with the space, who could acquire the company and deploy
additional capital and management resources to continue building upon an already
rapid growth trajectory.
has sold its portfolio company
to Management and
Grace Matthews, Inc. advised
Superior Capital Partners and Edge Adhesives
21
Gabriel Performance Products’ Acquisition of
BASF’s Capcure® Business
Overview
Results
Gabriel Performance Products, a portfolio company of Edgewater Capital Partners, is a
manufacturer of proprietary, high-performance chemicals and also provides custom
synthesis services to the chemical industry. Gabriel is headquartered in Ashtabula,
Ohio.
Grace Matthews’ process resulted in a highly synergistic transaction that allowed
Gabriel to become a market leader in mercaptan-based epoxy curing agents.
Due to the chemical similarities between Gabriel and Capcure’s products,
integration of Capcure into Gabriel’s operations was seamless. The Capcure
products were manufactured using existing equipment without adding any new
fixed costs or overhead. No customers were lost through the integration
process and today all incremental gross margin generated from sales of Capcure
products directly increases Gabriel’s EBITDA.
Gabriel management believed that bolstering its presence in the specialty epoxy curing
agents market could provide significant revenue and profit opportunities, and was
aware that BASF had an attractive product line of curing agents sold under the
Capcure® brand name. Gabriel believed the business to be non-core for BASF, which
had acquired the product line through the acquisition of Cognis Corporation in 2010.
In early 2012, Edgewater Capital Partners sought out Grace Matthews for assistance in
pursuing the acquisition.
Process
Grace Matthews leveraged prior relationships with senior BASF management at BASF’s
Ludwigshafen, Germany Headquarters in order to access key decision makers, and
ultimately led negotiations between Gabriel and BASF.
A challenging component of the transaction was handling the transfer of customer
relationships and inventory from BASF to Gabriel, without revealing confidential
information or disrupting customers’ order patterns. Grace Matthews negotiated a
transitional agreement that allowed BASF to service customers and reduce inventory for
a period of time post-close, while Gabriel finalized production specifications, scheduling,
and logistics for distribution of Capcure products from its Ashtabula facility.
has acquired select assets of the
Capcure® business from
Grace Matthews, Inc. advised
Gabriel Performance Products
22
Weatherford International’s Acquisition of Syrgis Performance Chemicals
Client
Results
Syrgis Performance Chemicals, or “PChem”, is a manufacturer of specialty
oilfield chemicals. PChem primarily services the oil and gas industry with
products that are used in a variety of end markets, including drilling and
stimulation, production, pipeline transportation and refining.
The buyer that emerged from this rigorous process was Clearwater
International, a subsidiary of Weatherford International, a worldwide
provider of equipment and services used in all phases of oil and natural gas
production. PChem’s future growth is expected to accelerate under the
new owner, as PChem’s custom formulation capabilities will greatly benefit
from Weatherford’s global reach and exceptional marketing resources.
The timing of the sale was excellent, as PChem was posting record sales and
earnings as the oil and gas industry in North America was experiencing rapid
growth due to the discovery and development of shale oil deposits in the
U.S. and Canada. PChem, which provides custom-formulated products to
match the unique characteristics of oil and natural gas deposits in specific
geographic areas, was well positioned to capitalize on growing oil and gas
production in North America, as well as continue expanding its overseas
footprint with sales in Russia and Central and South America.
a wholly owned subsidiary of
Syrgis Performance Products, LLC
Process
Grace Matthews contacted both strategic and private equity buyers for
PChem. Management presentations were conducted for a limited group of
buyers that expressed a strong interest in acquiring PChem. A smaller subset
of potential buyers was allowed to conduct more detailed due diligence.
has been acquired by
Grace Matthews, Inc. advised
Syrgis Performance Products
23
PPG Industries’ Acquisition of Spraylat Corporation
Overview
Results
Spraylat Corporation is a global manufacturer of industrial powder and liquid
coatings and is one of the largest privately held coatings companies in North
America. Spraylat, known for its technology and customer service, is a leader in
many of the niche markets it serves, including automotive wheel and tire
coatings, electronic conductive coatings, mirror coatings and solutions, and
architectural powder coatings. The company operates manufacturing facilities in
North America, Europe, and Asia and has customers in over fifty countries.
Grace Matthews’ process resulted in the successful sale of Spraylat
Corporation to PPG Industries at a value that exceeded the shareholders’
goals. The cultural, strategic, and product fits between the organizations
were a clear driver of value in the transaction. The acquisition strengthened
PPG’s capabilities in industrial coatings while simultaneously providing
access to Spraylat’s strong, worldwide customer base.
Prior to engaging Grace Matthews, the owners of Spraylat had been approached
by a strategic buyer that could realize significant synergies in a transaction. With
no readily apparent succession plan in place, the owners sought advice from
Grace Matthews on possible sale options.
Process
has sold certain assets to
Spraylat’s owners ultimately engaged Grace Matthews to run a timely sale process
targeted at strategic buyers that potentially had the most to gain in a synergistic
transaction. Grace Matthews identified a small group of global coatings companies
that could reasonably be expected to achieve the value goals of the shareholders.
After approaching these targets to gauge their interest, Grace Matthews met with
each potential buyer to discuss Spraylat and the synergy opportunities that an
acquisition could provide. GM then guided the sellers and potential buyers through
what became a highly competitive sale process.
Grace Matthews, Inc. advised
Spraylat Corporation
24
PolyOne Corporation’s Acquisition of ColorMatrix Group
Client
Results
Audax Group, a Boston-based private equity firm, engaged Grace Matthews
(along with a co-advisor) to develop and execute a strategy to maximize value
to a strategic buyer during the sale of ColorMatrix, a portfolio company of
Audax Group and a world leader in colorants and additives for plastics.
PolyOne Corporation successfully bid over 11x EBITDA for ColorMatrix,
whose global sales and EBITDA for June 30, 2011, were $196.8 million and
$43.6 million, respectively.
Having advised on ColorMatrix’s founder’s $175-million sale of the company
to Audax Group in 2006, Grace Matthews was very familiar with ColorMatrix
and the company’s ability to provide technical solutions for beverage
packaging, industrial extrusion, performance molding, and fiber end
markets.
The acquisition of ColorMatrix is a significant milestone in PolyOne’s
publicly stated commitment to focus more on specialty chemicals.
Process
The marketing process for ColorMatrix involved a broad auction that included
over 100 prospective private equity and strategic buyers. Grace Matthews,
based on our expertise in chemicals, plastics, and additives, focused solely on
high potential strategic buyers within the specialty chemicals industry.
After extensive research of market participation, product portfolios,
geographic footprints, and potential synergies, Grace Matthews proceeded
to handpick certain buyers, including PolyOne, for introductory meetings.
These “fireside chats” informally introduced the ColorMatrix story,
highlighted business fit, and generated strong interest from a number of
strategic bidders.
has sold its portfolio company
to
Grace Matthews, Inc. advised Audax Group
25
Landec Corporation’s Acquisition of Lifecore Biomedical
Client
Results
Landec Corporation (Nasdaq: LNDC), based in Menlo Park, CA, is a materials
science company that develops and markets patented polymer products for
food, agriculture, personal care and drug delivery applications. Grace
Matthews has a strong, long-standing relationship with Landec, having
advised the company on a number of transactions including its acquisition of
Dock Resins and a joint venture with Air Products and Chemicals.
Warburg Pincus set a minimum price target for Lifecore based on its return
of investment objectives. To meet the targeted value, Grace Matthews
negotiated closing consideration of $44.0 million, including $40.0 million in
cash and $4.0 million in assumed debt. Additional contingent payments of
up to $10.0 million based on Lifecore’s 2011 and 2012 performance were
structured by Grace Matthews to help Landec mitigate risk while
simultaneously achieving Warburg Pincus’ minimum sale price.
Process
Landec engaged Grace Matthews to perform an acquisition search that
would expand Landec’s capabilities in advanced materials. Working together,
Grace Matthews and Landec developed three criteria that acquisition
candidates had to possess: growth potential in areas beyond Landec’s core
food technology, biomaterial products that had synergies with the company’s
Intelimer® polymers, and a level of profitability that would be meaningfully
accretive to near-term financial performance.
During the process, Grace Matthews identified and qualified a number of
acquisition candidates, including Lifecore Biomedical (Chaska, MN), a
developer and manufacturer of biopolymers used in a wide range of
therapeutic treatments and medical research initiatives and a portfolio
holding of Warburg Pincus, a $30 billion New York based private equity firm.
Lifecore represents an important investment for Landec’s future in the area
of biomaterials. The acquisition significantly advances Landec’s commitment
to advanced materials in new, growing markets and achieves all the stated
objectives of the company’s acquisition strategy.
has acquired
from
Grace Matthews, Inc. advised
Landec Corporation
26
Columbia Paint Company’s Merger with Sherwin-Williams
Client
Results
Columbia Paint Company, based in Spokane, Washington, is a leading
manufacturer and retailer of architectural coatings in the Pacific Northwest.
The Company services the professional painting contractor, builder and do-ityourself markets through 43 company-owned stores.
The process generated three strong, competitive bids for Columbia. Grace
Matthews successfully negotiated and structured a merger with Sherwin
Williams that achieved the shareholders’ goals at an attractive valuation.
Because of its strong regional brands, favorable demographics, and proven
growth strategy, Columbia enjoyed sales and profit growth far in excess of
industry averages.
The final transaction was structured as a cash merger – which provided
shareholders with an extremely advantageous tax position for the
transaction.
Process
The shareholders of Columbia engaged Grace Matthews to market the
company to select buyers. In agreement with Columbia’s Board and
shareholders, Grace Matthews identified a group of the six best strategic
buyers that could reasonably be expected to achieve the Board’s objectives
relating to valuation, corporate culture and management succession.
Grace Matthews approached each of these six ideal buyers with a detailed
Offering Memorandum and customized analyses for each that took into
account the strategic fit and the buyer’s likely post-acquisition plans for
Columbia.
has merged with
Grace Matthews, Inc. advised
Columbia Paint & Coatings
27
Ceradyne’s Acquisition of Minco
Client
Results
The Philadelphia-based private equity group Argosy Capital engaged Grace
Matthews to sell their portfolio company, Minco, the world’s leading
producer of premium-grade fused silica, a key raw material used in hightemperature precision investment casting.
Grace Matthews prepared all of the documentation required for a full,
broad-based sale process, including an Offering Memorandum,
management presentation, a secure on-line due diligence data room, a
summary of synergies in China, and a detailed Letter of Intent: all of which
supported a full valuation for the business that would be required for a preemptive offer to be successful.
A key consideration was finding a potential buyer that would support Minco's
excellent growth prospects - the company had established strategic alliances
with major industry partners, and was in the process of setting up a joint
venture to enter the rapidly growing markets in China.
The process resulted in a very successful vertical integration of two
businesses at a purchase price that provided the client with a high return on
the initial investment.
Process
After a thorough business analysis and evaluation, including detailed financial
modeling to determine the expected values from both private equity and
strategic buyer perspectives, we determined that there was a small group of
strategic buyers that would be significantly affected by the sale of Minco,
including the Los Angeles-based Ceradyne (NASDAQ: CRDN). Minco was a
long-time supplier to Ceradyne’s Thermo Materials division, which stood to
gain significant cost savings from the vertical integration of Minco into its
operations.
Ceradyne showed strong interest in the acquisition, and requested the
chance to make a pre-emptive bid for Minco.
has acquired
Grace Matthews, Inc. advised Minco, Inc.
28
Akzo-Nobel’s Acquisition of Chemcraft
Client
Results
Grace Matthews has a long-standing client relationship with Amsterdam’s
Akzo-Nobel, the world’s largest coatings manufacturer. Over the last 10+
years, Grace Matthews principals have advised Akzo on numerous buy- and
sell-side transactions.
Because of our regular interaction with the debt and equity markets, we
were able to quickly and accurately determine the value that an aggressive
private equity group would put on Chemcraft.
With revenues in excess of $16 billion, Akzo had a strong interest in acquiring
Chemcraft, a highly profitable North American manufacturer of wood
finishes with annual sales exceeding $150 million.
This analysis provided our client, Akzo, with a baseline on which to build an
attractive package for both the shareholders and management, which was
ultimately accepted by Chemcraft.
This creative approach allowed Akzo to participate in and win a competitive
sale process while the other interested strategic buyers remained
bystanders.
Process
Despite the exodus of U.S. furniture manufacturing to China, both Akzo and
Chemcraft had managed to grow their wood coatings businesses in North
America based on product innovation and excellent customer service. The
two businesses were a natural strategic fit.
Chemcraft’s management initially pursued a private equity-backed
management buy-out, and didn’t believe a sale to Akzo or any other strategic
buyer would achieve their objectives.
has acquired
Grace Matthews recognized that only an approach that countered
management's objections to strategic buyers would allow Akzo into the
process.
Grace Matthews, Inc. advised Akzo Nobel
29
RoundTable’s Acquisition of Vesta
Client
Results
Vesta is North America’s leading manufacturer of silicone-based, single-use
medical devices. Vesta’s branded and private label products are sold to global
leaders in heath care including Abbott Labs, Baxter and Bristol-Myers Squibb.
Because of its growth prospects, high margins, and experienced
management team, Vesta generated a great deal of interest from the
private equity community with about 25 bids in the initial phase of a twostage auction process.
As one of the fastest growing businesses in its industry, Vesta had
been regularly contacted by both strategic and financial buyers
interested in acquiring the business.
Of the eight finalists, management partnered with RoundTable Healthcare
Partners, a Chicago private equity firm specializing in healthcare.
Process
The value of the recapitalization was about three times the amount of an
offer received just two years earlier, demonstrating the power of a wellexecuted, competitive sale process.
Vesta’s founding shareholders wanted to capture some of the value they had
created within the Company, but also had an interest in seeing the Company
continue as an independent firm with the resources it needed to maintain its
strong record of growth. The shareholders were supported by a young
management team that had helped build the business and the owners felt a
great deal of appreciation and loyalty to them, as well as to the rank-and-file
employees.
Despite the anticipation of a high level of interest from strategic, synergistic
buyers, the shareholders requested that Grace Matthews limit the sale
process to leading private equity firms that would provide existing
management with the opportunity for a meaningful equity position in the
business.
has acquired a majority interest in
Grace Matthews, Inc. advised Vesta, Inc.
30
Audax Group’s Recapitalization of ColorMatrix
Client
Results
In 2006, the shareholders of privately-held ColorMatrix (Cleveland) engaged
Grace Matthews to advise them on the sale of the company.
The first phase of the auction process resulted in 41 bids with a wide range
of values.
ColorMatrix is the world’s leader in liquid colorants for plastics, with
operations in the U.S., the U.K., The Netherlands, Brazil and China. Over half
of ColorMatrix’s revenues are outside the U.S.
Concurrently with the second round of bidding from the eight final parties,
we secured a “staple-on” debt package from GE Capital, which was well
equipped to underwrite a complex, multi-currency global entity like
ColorMatrix.
Process
Three strong, well-respected private equity groups bid aggressively in the
second round, resulting in a successful bid at the high end of the range. The
Shareholders and management ultimately chose the Audax Group based on
a combination of price, culture and shared values.
The company’s founders had grown the business to over $100 million in
revenue, and were seeking liquidity through a recapitalization or sale of the
business.
Grace Matthews assisted the owners with careful planning and positioning
the company for a sale, based on its strong management team, loyal
customers and solid international growth prospects.
has been recapitalized by
Based on these fundamentals, as well as a history of high margins and
double-digit growth, Grace Matthews recommended a broad two-stage
auction that would involve both strategic and financial buyers.
Grace Matthews, Inc. advised
ColorMatrix Corporation
31
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