Epoxy

December 22, 2021

Hurricane IDA Impacted Q3 Chemical Markets

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Lingering Impacts from Hurricane Ida Weighed on U.S. Chemical Production in October
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Jennifer Scott

WASHINGTON (December 1, 2021) – The U.S. Chemical Production Regional Index (U.S. CPRI) eased by 0.3% in October following a 1.6% decline in September and a 0.4% decline in August, according to the American Chemistry Council (ACC). Chemical output declined in all regions except the Northeast. With lingering hurricane and other supply chain disruptions, the largest decline was in the Gulf Coast region. The U.S. CPRI is measured as a three-month moving average (3MMA).

Chemical production was mixed in October (3MMA), with an improving trend in the production of synthetic rubber, manufactured fibers, other specialty chemicals, fertilizers, adhesives, coatings, and consumer products. These gains were offset by weakness in organic chemicals, plastic resins, basic inorganic chemicals, industrial gases, and crop protection chemicals.
US Chemical Regional Production Index

As nearly all manufactured goods are produced using chemistry in some form, manufacturing activity is an important indicator for chemical demand. Manufacturing output edged higher for a sixth consecutive month in October, by 0.1% (3MMA). The 3MMA trend in manufacturing production was mixed, with gains in the output of food and beverages, aerospace, construction supplies, fabricated metal products, machinery, computers, semiconductors, refining, iron and steel products, plastic products, rubber products, tires, paper, printing, apparel, and furniture.

Compared with October 2020, U.S. chemical production was ahead by 2.2%, a weaker comparison than last month, due to lingering impacts from Hurricane Ida. Chemical production continued to be higher than a year ago in all regions, however.
US Chemical Regional Production Index, Percentage Change – December 1, 2021

The chemistry industry is one of the largest industries in the United States, a $486 billion enterprise. The manufacturing sector is the largest consumer of chemical products, and 96% of manufactured goods are touched by chemistry. The U.S. CPRI was developed to track chemical production activity in seven regions of the United States. The U.S. CPRI is based on information from the Federal Reserve, and as such, includes monthly revisions as published by the Federal Reserve. The U.S. CPRI includes the most recent Federal Reserve benchmark revision released on May 28, 2021. To smooth month-to-month fluctuations, the U.S. CPRI is measured using a three-month moving average. Thus, the reading in October reflects production activity during August, September, and October.

Learn more at: https://www.americanchemistry.com/chemistry-in-america/news-trends/press-release/2021/lingering-impacts-from-hurricane-ida-weighed-on-us-chemical-production-in-october

https://www.americanchemistry.com/chemistry-in-america/news-trends/press-release/2021/lingering-impacts-from-hurricane-ida-weighed-on-us-chemical-production-in-october

December 21, 2021

Hexion To Be Sold

HOUSTON (ICIS)–US-based Hexion on Monday has entered into a definitive agreement to be acquired by private equity American Securities for $2.06bn, including the assumption of around $1.24bn in net debt for a total enterprise value of around $3.3bn.

The transaction is expected to close in the first half of 2022 and is conditioned upon the closing of Hexion’s previously announced sale of its epoxy business to Westlake Chemical.

The purchase price represents a 15% premium to the closing price as of 17 December and a 53% premium to the company’s closing share price on 30 July, the day prior to its announcement of its ongoing strategic review.

“This transaction, along with the pending sale of our epoxy business, is the conclusion of a comprehensive evaluation of strategic actions aimed at maximising value for our shareholders and best positioning the company for long-term growth,” said Hexion CEO Craig Rogerson.

Hexion, after agreeing in late November to sell its epoxy business for $1.2bn to Westlake, was planning an initial public offering (IPO) on the New York Stock Exchange along with a sale in a dual track. The remaining adhesives and versatic acids business had sales of $1.38bn and earnings before interest, tax, depreciation and amortisation (EBITDA) of $272m in 2020.

Earlier in a November interview with ICIS, Hexion CEO Craig Rogerson said he was considering a “sale of Hexion or either of the parts”. The company in April closed the sale of its phenolic specialty resins, hexamine and European-based forest products resins businesses to Black Diamond and Investindustrial for $425m.

www.icis.com/explore/resources/news/2021/12/20/10717799/private-equity-firm-acquires-hexion-for-2-06bn/

December 21, 2021

Hexion To Be Sold

HOUSTON (ICIS)–US-based Hexion on Monday has entered into a definitive agreement to be acquired by private equity American Securities for $2.06bn, including the assumption of around $1.24bn in net debt for a total enterprise value of around $3.3bn.

The transaction is expected to close in the first half of 2022 and is conditioned upon the closing of Hexion’s previously announced sale of its epoxy business to Westlake Chemical.

The purchase price represents a 15% premium to the closing price as of 17 December and a 53% premium to the company’s closing share price on 30 July, the day prior to its announcement of its ongoing strategic review.

“This transaction, along with the pending sale of our epoxy business, is the conclusion of a comprehensive evaluation of strategic actions aimed at maximising value for our shareholders and best positioning the company for long-term growth,” said Hexion CEO Craig Rogerson.

Hexion, after agreeing in late November to sell its epoxy business for $1.2bn to Westlake, was planning an initial public offering (IPO) on the New York Stock Exchange along with a sale in a dual track. The remaining adhesives and versatic acids business had sales of $1.38bn and earnings before interest, tax, depreciation and amortisation (EBITDA) of $272m in 2020.

Earlier in a November interview with ICIS, Hexion CEO Craig Rogerson said he was considering a “sale of Hexion or either of the parts”. The company in April closed the sale of its phenolic specialty resins, hexamine and European-based forest products resins businesses to Black Diamond and Investindustrial for $425m.

www.icis.com/explore/resources/news/2021/12/20/10717799/private-equity-firm-acquires-hexion-for-2-06bn/

December 20, 2021

Additional Arsenal Acquisitions

Arsenal’s Seal For Life Acquires Mascoat and Verdia
NEW YORK, December 17, 2021 – Arsenal Capital Partners (“Arsenal”), a private equity firm that specializes in investments in industrial growth companies, announced today that its global industrial coatings platform, Seal For Life Industries (“Seal For Life”), has acquired Mascoat Ltd. (“Mascoat”) and Verdia, Inc. (“Verdia”), both privately owned specialty industrial coatings companies.

Mascoat, based out of Houston, TX, has been a leading manufacturer of thermal insulation coatings, anti-condensation, and sound damping coatings since 1995.  The company serves a wide variety of industries with its coatings such as industrial, marine, commercial, and automotive applications.  Mascoat has helped to develop new ways to solve corrosion under insulation with its insulation coatings and pioneered the use of its sound damping and anti-condensation coatings to the commercial and yacht sectors.  The company has locations in The Netherlands and China, in addition to its base in Houston.

George More, President, CEO, and Founder of Mascoat, said, “We are delighted to become part of the Seal For Life platform. The combination of Mascoat’s industry-leading insulation and protective coatings with Seal For Life’s extensive coatings portfolio and global footprint will allow us to reach additional markets and customers, and will provide customers even more high-performance solutions to protect their critical infrastructure assets.”

Verdia is a leading polymer flooring manufacturer in the United States with deep expertise in polyurethane concrete flooring systems and offers a complete line of epoxies, polyurethane, and polyaspartics formulations. Inc. Magazine recognized Verdia as one of the Fastest Growing Companies in America for 2019. Verdia has been awarded USDA certification for its bio-based polyurethane floor coating produced from renewable and sustainable polymer sources. Verdia provides superior products, unparalleled customer service, and industry-leading technical support and focuses on providing long-lasting and environmentally conscious polymer solutions.  The company is based in Conroe, TX.
Tony Crowell, President, CEO, and Founder of Verdia, remarked, “Joining the Seal For Life platform provides Verdia with the critical mass and market access it needs to continue its remarkable growth trajectory. Our customers consider polymeric floor coatings as critical technology for protecting their high-value infrastructure assets, and we look forward to expanding applications of our highly sustainable products around the world.”

Jeff Oravitz, CEO of Seal For Life, remarked, “We are very pleased to welcome the Mascoat and Verdia teams to the Seal For Life family, and look forward to working with them to accomplish our vision of being the leading global provider of protective coating and sealing solutions for infrastructure markets. The incorporation of these highly specialized industrial coatings companies into the Seal For Life platform increases our global scale and the ability to meet the needs of our many global customers.”

Aaron Wolfe, an Investment Partner of Arsenal, said, “Mascoat and Verdia bring exceptional coatings technologies to the Seal for Life platform and have an excellent market reputation for providing the highest level of performance and quality to meet demanding customer requirements. These businesses provide highly complementary technologies and build further scale for Seal For Life.  We look forward to supporting these teams and investing in inorganic growth and completing additional acquisitions to continue to build Seal For Life’s position in the broader protective coatings and sealing solutions space for infrastructure applications.”

About Seal For Life Seal For Life provides corrosion prevention, waterproofing, fire and heat protection, and insulation products. The company offers industrial liquid coating products to protect critical infrastructure, heat shrink sleeves to protect pipeline joints from corrosion and degradation, cathodic protection products, visco-elastic adhesive solutions to protect assets from corrosion and water ingress; and cold-applied, single wrap and fused tape products. It offers products for many markets, such as marine, splash zone and underwater installation, renewable energy, onshore oil, gas, and water pipelines, insulation, casing filler, flooring, refinery, linings, cathodic protection, cables and wires, and waste water applications. Visit www.sealforlife.com for more information.

About Arsenal Capital Partners Arsenal is a leading private equity firm that specializes in investments in middle-market industrials and healthcare companies. Since its inception in 2000, Arsenal has raised institutional equity investment funds of more than $7.0 billion, completed more than 200 platform and add-on investments, and achieved more than 30 realizations. The firm works with management teams to build strategically important companies with leading market positions, high growth, and high value–add. For more information, please visit www.arsenalcapital.com.

December 20, 2021

Additional Arsenal Acquisitions

Arsenal’s Seal For Life Acquires Mascoat and Verdia
NEW YORK, December 17, 2021 – Arsenal Capital Partners (“Arsenal”), a private equity firm that specializes in investments in industrial growth companies, announced today that its global industrial coatings platform, Seal For Life Industries (“Seal For Life”), has acquired Mascoat Ltd. (“Mascoat”) and Verdia, Inc. (“Verdia”), both privately owned specialty industrial coatings companies.

Mascoat, based out of Houston, TX, has been a leading manufacturer of thermal insulation coatings, anti-condensation, and sound damping coatings since 1995.  The company serves a wide variety of industries with its coatings such as industrial, marine, commercial, and automotive applications.  Mascoat has helped to develop new ways to solve corrosion under insulation with its insulation coatings and pioneered the use of its sound damping and anti-condensation coatings to the commercial and yacht sectors.  The company has locations in The Netherlands and China, in addition to its base in Houston.

George More, President, CEO, and Founder of Mascoat, said, “We are delighted to become part of the Seal For Life platform. The combination of Mascoat’s industry-leading insulation and protective coatings with Seal For Life’s extensive coatings portfolio and global footprint will allow us to reach additional markets and customers, and will provide customers even more high-performance solutions to protect their critical infrastructure assets.”

Verdia is a leading polymer flooring manufacturer in the United States with deep expertise in polyurethane concrete flooring systems and offers a complete line of epoxies, polyurethane, and polyaspartics formulations. Inc. Magazine recognized Verdia as one of the Fastest Growing Companies in America for 2019. Verdia has been awarded USDA certification for its bio-based polyurethane floor coating produced from renewable and sustainable polymer sources. Verdia provides superior products, unparalleled customer service, and industry-leading technical support and focuses on providing long-lasting and environmentally conscious polymer solutions.  The company is based in Conroe, TX.
Tony Crowell, President, CEO, and Founder of Verdia, remarked, “Joining the Seal For Life platform provides Verdia with the critical mass and market access it needs to continue its remarkable growth trajectory. Our customers consider polymeric floor coatings as critical technology for protecting their high-value infrastructure assets, and we look forward to expanding applications of our highly sustainable products around the world.”

Jeff Oravitz, CEO of Seal For Life, remarked, “We are very pleased to welcome the Mascoat and Verdia teams to the Seal For Life family, and look forward to working with them to accomplish our vision of being the leading global provider of protective coating and sealing solutions for infrastructure markets. The incorporation of these highly specialized industrial coatings companies into the Seal For Life platform increases our global scale and the ability to meet the needs of our many global customers.”

Aaron Wolfe, an Investment Partner of Arsenal, said, “Mascoat and Verdia bring exceptional coatings technologies to the Seal for Life platform and have an excellent market reputation for providing the highest level of performance and quality to meet demanding customer requirements. These businesses provide highly complementary technologies and build further scale for Seal For Life.  We look forward to supporting these teams and investing in inorganic growth and completing additional acquisitions to continue to build Seal For Life’s position in the broader protective coatings and sealing solutions space for infrastructure applications.”

About Seal For Life Seal For Life provides corrosion prevention, waterproofing, fire and heat protection, and insulation products. The company offers industrial liquid coating products to protect critical infrastructure, heat shrink sleeves to protect pipeline joints from corrosion and degradation, cathodic protection products, visco-elastic adhesive solutions to protect assets from corrosion and water ingress; and cold-applied, single wrap and fused tape products. It offers products for many markets, such as marine, splash zone and underwater installation, renewable energy, onshore oil, gas, and water pipelines, insulation, casing filler, flooring, refinery, linings, cathodic protection, cables and wires, and waste water applications. Visit www.sealforlife.com for more information.

About Arsenal Capital Partners Arsenal is a leading private equity firm that specializes in investments in middle-market industrials and healthcare companies. Since its inception in 2000, Arsenal has raised institutional equity investment funds of more than $7.0 billion, completed more than 200 platform and add-on investments, and achieved more than 30 realizations. The firm works with management teams to build strategically important companies with leading market positions, high growth, and high value–add. For more information, please visit www.arsenalcapital.com.