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.

December 10, 2021

More On Recent Acquisition by Saint-Gobain

GCP to help Saint-Gobain target construction sustainability

Al Greenwood

09-Dec-2021

HOUSTON (ICIS)–Saint-Gobain expects its pending $2.3bn acquisition of GCP Applied Technologies will help it capitalise on rising demand for construction materials that can make homes and buildings more energy efficient and sustainable, an executive said.

The boards of both companies approved the deal, and Saint-Gobain expects to close on the acquisition at the end of 2022.

The GCP acquisition falls in line with Saint-Gobain’s focus on light construction and sustainability, the subject of its investor-day presentation in October, said Mark Rayfield, CEO of Saint-Gobain North America. He made his comments in an interview with ICIS.

GCP makes concrete admixtures and cement additives, and these can lower the carbon emissions produced from making concrete.

Concrete produces a lot of carbon dioxide (CO2), accounting for about 8% of the world’s emissions of carbon, according to Chatham House, a UK-based think tank.

“By adding additives and admixtures to cement construction in both infrastructure and commercial construction, you’re decarbonising that industry significantly and driving towards a more sustainable building practice,” Rayfield said. He estimates that these products can reduce the carbon intensity by a third or even higher versus traditional concrete.

Saint-Gobain already produces concrete admixtures and cement additives through its Chryso business, which it acquired earlier this year for €1.02bn. Much of Chryso’s footprint is in Europe and the Middle East. GCP complements this with its larger presence in North America, Asia-Pacific and Latin America.

“This is really building a significant global leader in this type of construction-chemical business across Saint-Gobain,” Rayfield said.

GCP also makes products used in fire protection, roofing underlayments and building envelopes. These products prevent air leakage, water damage and fire.

Saint-Gobain already makes these products, but the GCP acquisition will give the company a larger selection to meet the evolving needs of the construction industry.

The construction industry accounts for 40% of global emissions of carbon dioxide (CO2), and 120 countries have committed to carbon neutrality, Saint-Gobain said during its recent investor day.

To achieve those carbon-neutrality goals, policy makers will impose stricter energy-efficiency standards for buildings. On top of that, some companies are adopting their own energy-efficiency goals independent of government, and these targets could filter down to any buildings they renovate or construct.

Energy efficiency will put new demands on the performance of buildings. To meet those demands, companies will approach building design from a standpoint of systems and not from one of individual products.

“The world you and I grew up in was product, product product,” Rayfield said. “The world we are going into is systems and solutions.”

The GCP acquisition will help Saint-Gobain provide these companies with such systems, be it roofs or facades. The systems will make homes and buildings consume less energy, last longer and feel more comfortable.

CONSTRUCTION OUTLOOK
For residential construction, the US is at a good level of activity, Rayfield said.

However, it has not returned to the highs it reached before the financial crisis of 2007-2008. The following chart shows new housing starts in the US. Figures are in thousands of units and they are not seasonally adjusted.

Source: US Census Bureau

In the years following the financial crisis, the US construction industry has not built enough houses to keep up with the country’s demographics. Based on the rate of family creation, Rayfield estimates that the construction industry underbuilt by 4m houses.

The rate of housing construction is still good, but it is being moderated by supply-chain constraints, labour shortages and limited availability of land, he said.

For nonresidential construction, spending has surpassed its highs from the time of the financial crisis. However, it is still below pre-pandemic highs, as shown in the following table. Figures are in millions of dollars and are not seasonally adjusted.

Source: US Census Bureau

Nonetheless, Rayfield noted signs of recovery. “We’ve seen a lot nonresidenial construction in warehousing and those types of spaces that support the order-from-home type of environment,” he said.

At the same time, companies are renovating revamping offices so they can accommodate post-pandemic work habits.

“You’ll see the market in different areas go at different speeds, but I think it is starting to recover now,” Rayfield said.

That recovery should receive a boost from this year’s $1tr infrastructure package.

Construction uses several coatings, adhesives, sealants and elastomers (CASE), which are important chemical end markets.

The white pigment titanium dioxide (TiO2) is used in paints.

For polymers, expandable polystyrene (EPS) and polyurethane (PUR) foam are used in insulation.

Polyurethanes are made of methylene diphenyl diisocycanate (MDI), toluene diisocyanate (TDI) and polyols.

High density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes.

Insight by Al Greenwood

www.icis.com/explore/resources/news/2021/12/09/10714521/insight-gcp-to-help-saint-gobain-target-construction-sustainability/