News

Affiliate of Sun Capital Partners, Inc. Enters into Definitive Agreement to Sell Emerald Performance Materials

Leading Specialty Chemicals Producer Achieved Dramatic Growth as
Successful Independent Business Following Key Acquisitions, Capital Investment

Sun Capital Partners, Inc. (“Sun Capital”), a leading private investment firm specializing in leveraged buyouts and investments in market-leading companies, today announced that an affiliate has signed an agreement to sell its investment in Emerald Performance Materials (“Emerald” or the “Company”), a leading global producer and marketer of specialty chemicals for niche consumer and industrial end-markets, to American Securities LLC. Subject to regulatory approvals, the transaction is expected to close in the third quarter of 2014. Terms of the private transaction were not disclosed.

Headquartered in Cuyahoga Falls, Ohio, Emerald serves a wide range of attractive, multi-billion dollar endmarkets, many of which are recession-resistant or on strong growth trajectories, such as flavors & fragrances, food & beverage, personal and household care, composites, structural adhesives, coatings, and flooring, among others. The Company’s products enable end users to make goods that perform better through a variety of applications, such as adding color to paint and cosmetics, adding longevity to tires, imparting strength to adhesives and composites, providing scents to perfumes and soaps, and preserving soft drinks.

Emerald was created from the divestiture of six separate chemicals businesses by a corporate parent. Since the acquisition by a Sun Capital affiliate, a standalone infrastructure was put in place and manufacturing assets were reconfigured to optimize production capacity and focus on higher margin products. These efforts enabled Emerald to extend its product breadth and geographic reach through both organic growth and a series of strategic add-on acquisitions including CVC Specialty Chemicals and DSM Special Products.

Significant investments in new plant equipment have enabled the Company to expand capacity at its Rotterdam and Kalama, Washington sites in order to meet increased customer demand. Refocusing on higher margin specialty products and a commitment to investment in research and development has led to an enhanced product offering with more than 50 new products added to Emerald’s portfolio in recent years. These initiatives have transformed Emerald into a leading specialized chemical producer.

As a result of these efforts, Emerald has seen a dramatic improvement in profitability, achieving more than a three-fold increase in EBITDA while owned by a Sun Capital affiliate. Notably, the Company’s consistent EBITDA growth was uninterrupted by the global economic recession of late 2008 and early 2009, despite the challenging market conditions.
“We’re extremely proud that by applying our deep experience in building corporate carve-outs into market leaders, Emerald has transformed into one of the top performers in the industry,” said Marc Leder, Co-CEO at Sun Capital. “After completing a series of strategic acquisitions, making significant investments in new equipment, and expanding the Company’s high-margin product portfolio, we’re confident Emerald is poised for continued success under its new owner.”

This transaction marks Sun Capital’s fifth exit of 2014.  Last year the firm completed eight exits and two successful IPOs, leading to more than $1 billion in realizations for 2013 — a record for the firm.

About Sun Capital Partners, Inc.
Sun Capital Partners, Inc. is a pioneer in private equity investing, uniquely combining the financial skills and resources of a traditional private equity firm with the insight and expertise of a world class operating team. The firm focuses on market-leading companies that can benefit from our in-house professionals, resources, and expertise in their efforts to materially improve operating performance. Sun Capital affiliates have invested in more than 335 companies worldwide with combined sales in excess of $45 billion since our inception in 1995. Sun Capital has offices in Boca Raton, Los Angeles and New York, and affiliates in London, Frankfurt, Paris, Luxembourg, Shanghai and Shenzhen. For more information, visit www.SunCapPart.com