Grace Matthews

Grace Matthews
Industrial General Overview
Grace Matthews Overview
Boutique investment banking firm
Services
 Strong, experienced and well-respected transaction advisors

Business sales
 National presence with global reach

Corporate divestitures
 Fifteen professionals; over 150 completed transactions

Recapitalizations and management buy-outs
 Recognized expertise in many industries including industrial
services, construction services, niche manufacturing, industrial
equipment, equipment rental, packaging, metals, specialty
chemicals and coatings

Acquisition searches

Capital raises

Corporate finance advisory services
 Entrepreneurial culture; large organization experience

Fairness opinions
Typical engagements
Transaction breakdown
 Clients include privately-held businesses, private equity funds,
and large, multinational corporations
Buy-Side
20%
 End-to-end service from valuation through closing
 Transaction sizes range from $10 to $500 million
Sell-Side
65%
Recapitalizations / Other
10%
Fairness Opinions/
Strategic Alternatives
5%
2
Transactional Capabilities
Sell-side
Global access to strategic buyers and financing sources
Client profiles


High-quality, privately-held companies

Global 2000 corporate multinationals

Private equity portfolio companies


One-third of transactions are cross-border
 Long-term relationships with hundreds of leading private
equity firms, hedge funds, private investors
 Extensive relationships with a variety of financing sources
Process types

Track record of high-level access to global strategic buyers

Limited, confidential, strategic sales (1-6 strategic buyers)

Banks

Broad auctions

Private equity

Recapitalizations

Alternative sources

Management buy-outs

Special situations
Buy-side
Strategic vs. financial buyers
Client profiles


Large multinational corporations

Incumbent management with active MBO opportunity
 80% of GM sell-side clients are acquired by strategic
buyers
 This largely eliminates potential conflicts of interest other
groups may have when selling primarily to private equity
Process types


Exclusive, focused searches in specific industry sectors

Single target engagements
Private Equity
20%
 Broad scope searches with multi-year engagement resulting
in multiple acquisitions
Strategic
80%
3
Established Relationships with Private Equity Groups
 Strong relationships with private equity groups
 GM principals have completed transactions with all below
 Regular attendees of ACG Intergrowth & Capital Connect Events
4
Industries and Clients Serviced
Representative Clients
Industry Sector Experience
Construction
Services
Industrial
Services
Niche
Manufacturing
Industry
Experience
Chemical and
Coatings
Industrial
Equipment
Packaging
Metals
5
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
 Recent multinational clients include the following:
 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
 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 strategic buyers
 Approximately one-third of our deals in the last three years were
cross-border
6
Unprecedented M&A Market Dynamics
An Incredible Seller’s Market

We are approaching a precipice in the M&A market expected to meet or exceed activity
and valuation levels seen in 2007

Liquidity in debt markets is at an all time high, giving potential buyers access to large
amounts of inexpensive capital

Lenders are facing intense pressure to place capital, driving them to lend at lower rates and higher
multiples

The attractive debt market is allowing private equity groups to reach valuations that can often
compete with strategic buyers

Additionally, private equity groups have significant uninvested capital, further motivating
them to aggressively pursue deals

Finally, successful middle market businesses are scarce in the market and are commanding
impressive premiums

In contrast to the M&A boom seen in 2006 and 2007, which was proceeded by several decades of
economic growth, the current market follows a historical downturn that significantly reduced the
number of viable middle market acquisition opportunities
As seen in the past, ideal market conditions like those we are currently experiencing
likely will not last long
8
Liquidity is at an All Time High

We are currently in the midst of one of the most attractive debt markets ever seen

Intense competition among lenders is driving leverage up and rates down, and causing
lenders to be more flexible than ever on covenants and structures

This debt environment allows private equity buyers to reach higher valuations than ever
before for attractive middle market companies
Middle Market LBO Debt Multiples
6.0x
5.7x
5.6x
5.0x
4.0x
3.3x
3.0x
2.0x
4.7x
4.1x
2.5x
1.0x
0.0x
2007
2009
Senior Debt
Total Debt
9
2014
Private Equity Firms are Eager to Deploy Capital

Pent up demand from Private Equity Funds

Approximately $470 billion of dry powder remains on the sidelines

Capital overhang has, and will continue to drive valuations higher and motivate
private equity groups to close deals quickly
U.S. Private Equity Capital Overhang
$800
$700
$580
$600
$500
$470
$570
$520
$480
$470
$460
$350
$400
$300
$200
$100
$0
$ in Billions
2006
2007
2008
2009
2010
2011
2012
2013
Source: Pitchbook
10
Interest Level is High for Middle Market Companies

Good companies that weathered the recession are like gold in the marketplace

Very few companies out there

High quality companies demand a very healthy premium, and this is being reflected in
increased valuation multiples
Average U.S. Middle Market EV/EBITDA Multiple
12.0x
10.6x
10.0x
9.3x
8.0x
6.6x
6.0x
4.0x
2.0x
0.0x
2007
2009
11
2014
Overview of Grace Matthews Value-Added
Services
Understand the Business, Develop a Sales Strategy

Goal is to put together a comprehensive marketing
strategy for the business

We are looking for the description that puts the business
in the most positive light

What are the value drivers of the business?

What makes the business successful?

What differentiates the business from its competitors?

What special features does the business bring to the
table?

Product and service offering

Management capabilities

Growth opportunities
Key Takeaways:
 A thorough story ensures bids
are meaningful
 Complete information is
critical to holding value once
you receive bids
 A tailored story must be
created for every client and is
unique depending on the
value drivers and the story
you wish to tell buyers
 See Case Study: Chr. Hansen
Excipients the “no financial
statements” book
 or
Grace Matthews figures out the value drivers of the business and
creates a strategy to get buyers to pay for them
13
 See Case Study: ColorMatrix
“actually, you are not in
plastics”
Assemble a Comprehensive List of Buyers


Often a comprehensive list is more buyers than a
business owner contemplates
Take the time to contact and educate every potential
buyer and discuss the opportunity

Helps refine our pitch

Helps us understand what is important to buyers

We never ever send information without talking to a
buyer first
Key Takeaways:
 Putting a nice cover on top of
financial statements and
mailing it out, generally does
not work
 Absolutely need to
understand the potential
motivations of buyers in order
to generate interest
 This is especially true of
strategic buyers, who require
you to do much of the
upfront work for them
 Example: Raabe Corporation
“We know who the buyer will
be”
14
Other Important Steps in a Process

Get confidentiality agreements in place


We call every buyer to explain the opportunity in detail
Handle questions as they arise

Questions and answers are generally catalogued




Helps us see where issues may be developing
See how buyers are looking at the Company
Allows us to track who is really doing their homework
Manage the due diligence process

Build a virtual data room

Collect bids

Schedule management presentations




Prepare the actual presentation along with
management
Stay active during every step of the process
Legal background can help when conflicts arise
Pick a horse and hold value
15
Key Takeaways:
 The time period in between
Confidentiality Agreement
and Bids is an important one
 Questions and comments
give you clues where buyer
concerns may arise
 ANY time you are meeting
with a potential buyer
communication is important.
Grace Matthews stays with
you because its very easy to
lose control during those
more casual meetings
 See Case Study: Celeste visits
and questions galore!
Recent Transaction Case Studies
Allcast’s Sale to Aavid Thermalloy
Client
Results
Based in Allenton, Wisconsin, Allcast is a precision aluminum die
casting company serving customers in the lighting, automotive,
recreational vehicle, industrial products, and consumer goods
markets. After experiencing significant growth in the business
since 2010, the owners decided to pursue a sale of the
company. Allcast hired Grace Matthews to market the business
to financial buyers and to structure the transaction to maximize
value for the shareholders, while allowing the existing
management team to remain in place and to invest with the
new owners.
The purchase of Allcast by Aavid Thermalloy was a win-win for
all parties involved - the owners of Allcast, the management
team and employees, and Aavid Thermalloy. The owners were
able to find a logical buyer at an attractive price, the
management team remained in place to grow the business,
and Aavid gained access to Allcast's manufacturing
capabilities and institutional knowledge.
Process
After listening intently to the desires of Allcast's management
and owners, Grace Matthews began the process of finding the
right buyer for the business. Grace Matthews prepared offering
materials, introduced the Allcast story, highlighted the business
fit, and generated interest from a number of qualified buyers.
Despite a 65% customer concentration, Grace Matthews was
able to find the right buyer for the business in Aavid Thermalloy,
a supplier of heat sinks and thermal management packages
used for cooling electronics and systems. The acquisition of
Allcast provided Aavid Thermalloy with highly engineered die
casting capabilities, in addition to a complementary blue-chip
customer base.
has been acquired by
a portfolio company of
Waukesha, WI
Grace Matthews, Inc. advised
Allcast on this transaction
17
Management Buyout of S.R. Sales
Client
Results
An experienced executive, John Steindorf, was seeking to
acquire an industrial service business. While acting as part-time
consultant to S.R. Sales, a specialty distributor of obsolete and
excess spare parts, Steindorf approached the owner regarding
a potential sale of the business. Through a number of
conversations, Steindorf and the owner were able to find a
mutually agreed upon purchase price.
After a short due diligence process, John Steindorf and Trivest
purchased S.R. Sales, with the owner’s son maintaining his
equity stake and leadership position in the business.
By partnering with the right private equity group, Grace
Matthews was able to structure the best financial package for
the executive while simultaneously moving quickly to close the
transaction.
Process
Grace Matthews met with both Steindorf and the owner to
understand each party’s objectives. Through strong relationships
with private equity firms across North America, Grace Matthews
was able to introduce Steindorf to a number of interested
financial buyers.
Miami, FL
has acquired
As part of the transaction, it was critical that the owner’s son
remain in a leadership position with the Company. After careful
evaluation of interested parties, and with input from Steindorf
and the existing ownership team, Grace Matthews was able to
find the right financial partner in Trivest Partners. Trivest met
each party’s objectives: the purchase price, proposed
ownership structure and incentive plans, and was committed to
supporting and growing the business.
Waukesha, WI
Grace Matthews, Inc. advised
Trivest Partners on this transaction
18
Audax Group’s Acquisition of Northern Wire
Client
Results
Northern Wire is one of the largest privately held wire formers in
North America, servicing the lawn and garden, agricultural,
recreation and general industrial markets. Northern Wire’s
shareholders engaged Grace Matthews to develop and
execute a strategy to maximize value utilizing Grace
Matthews’ long-standing relationships and expertise in the
industrial manufacturing market.
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, and a detailed overview of
Northern Wire’s strong relationship with John Deere. The
process supported and resulted in a full valuation and
purchase price for the business, providing a highly successful
outcome for the client.
Process
The marketing process for Northern Wire involved a broad
auction that included both private equity and strategic
buyers. After extensive research on Northern Wire’s markets
and operations, Grace Matthews was able to target buyers
that could leverage Northern Wire’s existing customers and
deliver operating synergies to its business platform. Grace
Matthews introduced the Northern Wire story, highlighted the
business fit, and generated interest from a number of
qualified buyers, including the Audax Group.
has been acquired by
Grace Matthews, Inc. advised
Northern Wire, Inc. on this transaction
19
Safway Steel Services Sale to Odyssey Investment Partners
Client
Results
GM had worked with Safway Steel Services (“Safway”) over a
10 year period, assisting management with numerous
acquisitions as the company grew from about $200 million to
$700 million in sales. GM also worked with the management
team to secure a significant equity position in 2005. In 2009,
Safway’s parent company, ThyssenKrupp Steel (“TK”) out of
Germany made the decision to sell Safway. GM worked
closely with Safway management through this process as
they reviewed multiple bids that came in from both private
equity and strategic investors.
Grace Matthews and Safway ultimately sold the company to
Odyssey Investment Partners out of New York. This deal
closed in December of 2009 at an attractive value for the
parent company, ThyssenKrupp. Lending (about $260 million)
was provided by multiple institutions.
has been acquired by
Process
Grace Matthews worked with Safway management to help
determine who the final buyer would be. Important issues
included: the buyer’s willingness to support growth going
forward, the terms of any reinvestment by the management
team, and ongoing contractual issues relating to
employment and capital structure.
from
Grace Matthews, Inc. advised Safway
Management and ThyssenKrupp on this transaction
20
Strategic Recapitalization of Universal Form Clamp by J.H. Whitney
Chicago-based Universal Form Clamp is North America’s leading supplier of key
consumables for the concrete construction market. Products include scaffolding,
concrete forms and ties, and concrete accessories. Historically a manufacturer,
UFC now sources a large number of their products from China.
and related entities have been
acquired by
Management had grown the business to a very profitable $120 Million in sales, and
wanted to recapitalize the business to create liquidity for the shareholders and
provide capital for growth.
Universal Building Products, Inc.
Soon after starting the sale process, we learned that the private equity group J.H.
Whitney was trying to acquire a competitor of UFC. We approached J.H. Whitney
and pointed out key synergies between UFC and their target, and negotiated a
higher priced transaction due to these synergies than a stand-alone sale could
justify.
Grace Matthews, Inc. advised
Universal Form Clamp Co. on this transaction
21
with the equity financing provided
primarily by
Safway / ThyssenKrupp Engagement
Safway Services, Inc. (“Safway”) retained Grace Matthews to sell its Formwork
Division. Safway was a long standing client of Grace Matthews. Grace Matthews
has advised Safway on 13 acquisitions and counseled management on a number
of executive compensation issues over the years.
has acquired the assets of
Safway’s Formwork Division was a national provider of concrete forms with 9
locations spread across the United States. Safway spent a significant amount of its
time developing its products and, as a result, its products had significant
competitive advantages. However, because its footprint was too broad, it was
unable to capitalize on its product’s superior technology and generated
disappointing results.
Safway Formwork Systems, LLC
Grace Matthews ran a nation-wide process and was able to get buyers to focus
on the existing distribution locations established by Safway and the products
competitive advantages. As a result, Grace Matthews was able to generate a
sales price in excess of $25 Million for a business that was generating negative
operating income.
Grace Matthews, Inc. advised
Safway Services, Inc. on this transaction
22
from
ThyssenKrupp’s Acquisition of A-C Equipment Services
Client
Results
A-C Equipment services provides rotary kilns to industrial
customers, primarily cement, pulp and paper facilities. The
Company also provides maintenance services for these kilns.
Maintenance is a very important service for the customers
because a shut down in the kiln would mean a very
expensive plant closure for the customer.
Following better performance, Grace Matthews ran a new
process and secured a strategic bid 30% higher than the next
closest bid, and above the Sellers’ expectations
Process
has been acquired by
Polysius
Grace Matthews was retained to sell the business where
owners had “rich” price expectations. During the process,
the Company had a significant downturn in performance.
Grace Matthews advised client to take the Company off the
market and to focus on generating more typical results.
a subsidiary of
ThyssenKrupp
Grace Matthews, Inc. advised
A-C Equipment Services on this transaction
23
Samuel Manu-Tech’s Acquisition of Northland Stainless
Client
Results
Northland Stainless is a premier manufacturer of high-end
stainless steel tanks for the pharmaceutical, food, beverage
and ethanol markets. Northland's owner had attempted to
sell the Company to competitors on his own and had gotten
pretty far down the road with one buyer and had achieved
a valuation of $5 million. However, his leverage was limited
because owner did not run a true “process.”
Northland was sold to Samuel Manu-Tech, a publicly
traded Canadian company for over $11million.
Samuel Manu-Tech had a great deal of exposure in both
the tank and metal equipment market and valued the
blue-chip customer base that Northland brought to the
table.
Process
Grace Matthews realized that this valuation was very low
given the growth the Company had experienced and the
value the customer base would provide to a strategic buyer.
Grace Matthews took the engagement with no doubts that
a process could add value. Grace Matthews was quickly
engaged to re-market the Company using an auction
process, strict timelines and potential buyers outside of the
owner’s scope.
has been acquired by
Grace Matthews, Inc. advised
Northland Stainless, Inc. on this transaction
24
Shale-Inland’s Acquisition of Main Steel Polishing Company
Client
Results
Main Steel Polishing Company, based in Tinton Falls, New
Jersey, is the largest national toll processor of stainless steel
and other metals.
Throughout the United States, the
company operates with facilities in New Jersey, Pennsylvania,
Ohio, Georgia, Illinois and California.
Shale-Inland purchased Main Steel in 2011. The purchase
established a solid platform for Shale-Inland, which they have
grown both organically and through acquisition.
Grace Matthews had a longstanding relationship with the
company, having advised them on their divestiture of the
Main Tape business in 2002, and a subsequent debt
refinancing in 2003. In 2010, the shareholders engaged
Grace Matthews to market the company.
Process
has been acquired by
Grace Matthews contacted potential strategic and private
equity buyers who would benefit from Main Steel’s
geographic footprint and extensive metal processing
capabilities.
with an equity investment in
Shale-Inland from
Craig Bouchard (former co-founder of Esmark, Inc.), had
recently formed Shale-Inland, a company focused on
consolidating stainless and carbon steel distribution,
stamping and fabrication in the United States. Mr. Bouchard
worked with The Stephens Group (one of the early investors in
Walmart) and GE Capital. Main Steel aligned perfectly with
Craig Bouchard’s growth plan, and Shale-Inland quickly put
forth an attractive offer to acquire the company.
Grace Matthews, Inc. advised
Main Steel Polishing on this transaction
25
Sharp Packaging – Sale to Investor Group
Overview
Results
Headquartered in Wisconsin, Sharp Packaging is a manufacturer
of pre-opened bags on a roll and automated packaging
equipment. Sharp serves a diverse set of end-use markets and
utilizes a highly-attractive razor/razor blade business model. In
2006, Sharp was acquired from its founder by PS Capital Partners.
Based on management’s desire for an orderly transition and
to maintain production in Wisconsin, Grace Matthews
executed a two-stage auction process primarily focused on
private equity buyers.
Best-fit strategic buyers were
contacted on a one-off basis to ascertain any potential
outlier valuations.
In the years following the acquisition by PS Capital, Sharp was
regularly contacted by both strategic and financial buyers
interested in acquiring the business. By late 2010, PS Capital and
its investor base became interested in liquidity following significant
growth in the business. In addition, Sharp’s CEO expressed interest
in transitioning out of the business to purse other opportunities and
allow the COO to assume the CEO role.
Sharp generated a great deal of interest from the private
equity community with more than 25 bids in the initial phase
of the process.
Of the finalists, management partnered with a Midwestern
family office managing a pool of capital it had generated
from a prior liquidity event. The family was seeking to invest
capital in established middle-market manufacturing
companies in the Midwest. The buyer supported Sharp’s
existing management team and committed to continue
operating the company’s main production facility.
Management sought a true financial and business partner to
support the company through its next phase of growth. The
company and its investors also wanted a buyer to continue
operating Sharp’s facility in Wisconsin.
The final value of the transaction exceeded the high end of
the initial value range provided by potential buyers,
demonstrating the power of a well-executed, competitive
sale process.
Challenges
-
Volatile polyethylene resin prices (primary raw material)
Contract year for largest customer
Capacity constraints in main facility
Management transition
26
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
27
The Gladstone Companies’ and Akoya Capital’s Acquisition
of Edge Adhesives from Superior Capital Partners
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.
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.
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.
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
28
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 postclose, while Gabriel finalized production specifications, scheduling, and
logistics for distribution of Capcure products from its Ashtabula facility.
29
has acquired select assets of the
Capcure® business from
Grace Matthews, Inc. advised
Gabriel Performance Products
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
has been acquired by
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.
Grace Matthews, Inc. advised
Syrgis Performance Products
30
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.
Grace Matthews, Inc. advised
Spraylat Corporation
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.
31
ITW’s Acquisition of Celeste Industries Corporation
Client
Results
Celeste Industries Corporation (Easton, MD) is a provider of
transportation chemicals, including the well-known “blue juice”
used on aircraft, as well as other aviation cleaners, degreasers,
and soaps. Celeste was the last remaining investment in an early
portfolio of private equity group, Brockway Moran & Partners.
By 2010, a general economic recovery was underway and the
airline industry was rebounding nicely from its depression. A
new process begun during this time, found a nice group of
interested buyers, both strategic and private equity. The
auction process yielded a price above the sellers
expectations despite the industry downturn a few years earlier.
Process
Brockway Moran & Partners engaged Grace Matthews to explore
a sale of the Company to strategic buyers. Celeste Industries had
undergone a number of recent transformations. The Company
was originally in the business of providing transportation amenities.
Post September 11, the Company was forced to re-think its
business model and focus specifically on chemicals.
While the chemical business was profitable and growing, finding a
buyer was challenging. When the process was first begun in 2007,
many potential buyers were still afraid of investing in the airline
industry. At the same time, oil prices drove up air fuel prices,
decreasing passenger traffic.
Grace Matthews counseled Brockway Moran to remove the
Company from the market, continue to exit the remaining
amenities part of the business and focus on improving
performance while we waited for a recovery in the airline industry.
32
has sold its portfolio company
to
Chr. Hansen Excipients and Coatings Division
Client
Results
Having successfully assisted Chr. Hansen in divesting its Specialty
Sweeteners Division, Grace Matthews was engaged again to
market the Company’s Excipients and Coatings Division based
in Stoughton, Wisconsin. The Division made sugar sphere
coatings and other inactive ingredients used in the manufacture
of tablets and capsules by the pharmaceutical industry.
The business was sold to Colorcon, a developer and supplier
of formulated products for the pharmaceutical industry, at a
value well above the seller’s expectations.
Though Chr. Hansen had invested heavily in the Division’s FDA
compliant manufacturing facility, the business had never
achieved the desired sales volumes and had few synergies with
Chr. Hansen’s other food ingredient businesses. Though the
business operated below capacity and was unprofitable, Chr.
Hansen’s management decided to divest it provided it could
attain a reasonable value.
The acquisition expanded Colorcon’s distribution, technical
service, and sales infrastructure, and provided it with several
unique products to add to its global product portfolio. The
acquisition also enhanced Colorcon’s manufacturing
capabilities at a critical time, as it had recently reached an
agreement with Dow Chemical to take on responsibility for
the development and distribution of Dow Pharmaceutical’s
oral, controlled-release products, an area where the Division
had special expertise.
Process
Grace Matthews marketed the business to selected strategic
buyers in the food ingredient and specialty chemical industries,
as well as to appropriate private equity groups that had an
interest in the pharmaceutical and fine chemicals markets.
Grace Matthews tailored the process to focus potential buyers
on
the
Division’s
strengths: its
new, state-of-the-art
manufacturing plant, expertise and market strength in timerelease coatings, and range of tangible growth opportunities.
33
has acquired the
Excipients Division of
Grace Matthews, Inc. advised
Chr. Hansen on this transaction
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.
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.
Process
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 on this transaction
34
Grace Matthews Team
Grace Matthews Team
John Beagle
Douglas Mitman
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, consumer products, retail,
software, materials and a variety of other manufacturing and
service industries.
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 $250 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.
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.
Tammie Miller
Timothy Oleszczuk
Timothy Oleszczuk, Managing Director, has over 20 years of
experience in mergers, acquisitions and corporate finance
involving diverse industries. Prior to joining Grace Matthews,
Tim managed the Milwaukee office of Resource Financial
Corporation.
Tammie Miller, Managing Director, has over 20 years of
experience in mergers, acquisitions, and corporate finance. Prior
to joining Grace Matthews, Tammie was a Senior Vice President
of Operations at Innovative Resource Group, a former subsidiary
of Cobalt Corp. (now APS Healthcare).
Before beginning his investment banking career, Tim was a
shareholder at the Milwaukee law firm of Godfrey & Kahn,
S.C., where his legal practice focused on mergers and
acquisitions, corporate finance and insurance law. Tim holds
a B.B.A. and an M.B.A. degree, both Summa Cum Laude,
from the University of Wisconsin-Madison and a J.D. degree
from the University of Michigan.
Tammie’s prior investment banking experience includes positions
at Alex. Brown & Sons, First National Bank of Chicago, Kidder
Peabody, and Lehman Brothers. Tammie is a C.F.A. and earned
her B.A. degree, with High Honors, in Latin American Studies and
Astrophysics, as well as an M.B.A. with an emphasis in Finance,
both from The University of Chicago.
36
Grace Matthews Team
Kevin Yttre
Benjamin Scharff
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, technology,
and general manufacturing.
Kevin Yttre, Managing Director, joined Grace Matthews upon
receiving his M.B.A from Harvard Business School. Previously,
Kevin held a number of engineering and management positions
with ICI’s Uniqema specialty chemicals business in the U.S. and
The Netherlands.
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.
Thomas Osborne
Andrew Hinz
Thomas Osborne focuses on new business development and
strategic planning for Grace Matthews. Prior to joining Grace
Matthews, Mr. Osborne 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.
Andrew Hinz, Director, joined Grace Matthews in 2007. Previously,
Andy was an Equity Research Analyst with Robert W. Baird & Co. in
Milwaukee where he focused on the retail and restaurant
industries. At Baird, Andy performed fundamental industry and
company research and provided investment recommendations to
support institutional equity investors.
Mr. Osborne 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.
Andy is a Chartered Financial Analyst (CFA) and holds a B.B.A. in
Accounting and Finance from the University of Wisconsin - Eau
Claire and a M.B.A. from the Kellogg School of Management at
Northwestern University.
37
Grace Matthews Team
Miguel Mireles
Trent Myers
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, software, and a
variety of other manufacturing and service industries.
Miguel Mireles provides support and analytics for clients across
a variety of chemical and material industries. Before joining
Grace Matthews, Miguel was a Vice President and Head of
Business Development at Xolve, Inc., a venture and strategic
backed advanced materials company.
Miguel holds an M.B.A. from the University of WisconsinMadison, a B.S. in Chemical Engineering from Texas Tech
University, and received his Juris Doctorate degree from the
University of Wisconsin Law School.
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.
Jon Glapa
Andrew Cardona
Jon Glapa, Associate, joined Grace Matthews in 2011. Jon has
supported clients in the colorants, coatings, adhesives, organic
materials and plastics industries.
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.
Jon holds a B.A. in Mathematics as well as a Secondary Field
degree in Economics from Harvard University. At Harvard, Jon was
a member of the Charles River Growth Fund, the college’s oldest
student-run investment club.
Andrew received a B.B.A. from the University of WisconsinMadison, with an emphasis in finance and investment
banking. At Madison, Andrew received the UW StudentAthlete Academic Excellence Award and the Arthur Ashe Jr.
Award, a National Academic Award for Scholar Athletes.
38
Grace Matthews Team
Patrick Maag
Nick Kozik
Patrick Maag, Analyst, joined Grace Matthews in 2013. Patrick
supports clients in a variety of chemical and materials industries.
Nick Kozik, Analyst, joined Grace Matthews in 2013 as a Summer
Analyst. During his time at Grace Matthews, Nick has supported
clients in a variety of industries including scaffolding, insulation,
industrial services, and metal fabrication. Prior to Grace
Matthews, Nick held a position at Northwestern Mutual Financial.
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.
Nick holds a B.B.A in Finance and a B.A. in Psychology from the
University of Wisconsin-Milwaukee, where he was a former
member of the Collegiate Entrepreneurs Association.
George Yang Liu
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.
39
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