Arsenal Capital Partners acquires Hastings’ Danlin Industries

Arsenal Capital Partners has acquired Danlin Industries from Hastings Equity Partners. Headquartered in Thomas, Oklahoma, Danlin provides production chemicals, capillary services and completion chemical solutions to oil & gas exploration and production companies across Oklahoma, Texas, Wyoming, Arkansas, Louisiana, Colorado, New Mexico, Kansas and Utah.

PRESS RELEASE

Arsenal Capital Partners, a leading New York-based private equity firm that invests in middle-market specialty industrial and healthcare companies, announced today the acquisition of Danlin Industries from Hastings Equity Partners.

Headquartered in Thomas, Oklahoma, Danlin provides production chemicals, capillary services and completion chemical solutions to oil & gas exploration and production companies across Oklahoma, Texas, Wyoming, Arkansas, Louisiana, Colorado, New Mexico, Kansas and Utah.

On March 10, 2014, Arsenal Capital also announced the acquisition of Kel-Tech Inc., a provider of specialty chemicals and related services to production, field stimulation and drilling operations in the Oil & Gas market in the Permian Basin.

“Both Danlin and Kel-Tech are high quality service providers with long standing relationships in their respective geographies. We are excited about partnering with each of the companies to enhance service and technical solutions for their customers,” said Tim Zappala, a Partner who co-heads Arsenal’s Specialty Industrials practice.

“Hastings has been an excellent partner for Danlin, helping us almost double in size over the last 3 years and supporting us as we reshuffled our management team upon the retirement of our owner. We now look forward to our next phase of growth under our new partnership with Arsenal Capital Partners,” commented Roger Floyd, Chief Executive Officer of Danlin.

“Roger and his team have a great portfolio of products and technical expertise. We look forward to working with the team to support their customer growth across multiple regions in North America,” said Shawn Abrams, an Operating Partner in Arsenal’s Specialty Industrials practice.

The investment in Danlin and Kel-Tech follows Arsenal’s recent acquisition of Flowchem Ltd., a leading specialty chemical provider to the pipeline industry. Flowchem provides Drag Reducing Additives to improve pipeline flow in onshore and offshore pipeline applications, reducing drag and turbulence in petroleum pipelines and increasing throughput capacity and energy efficiency, providing significant cost savings to pipeline operators.

Arsenal’s other current investments in the specialty industrial and energy sectors include International Fiber Corporation, the leading supplier of cellulose‐based insoluble fiber products for food and industrial applications globally; Dash Multi-Corp., a leading manufacturer of formulated polyurethane, vinyl plastisol, specialty coatings as well as recycled rubber products; IGM Resins, a leading provider of intermediates to the global ultraviolet (“UV”) radiation cure coatings, inks and adhesives industry; Chromaflo Technologies, the largest independent global pigment dispersion provider to the architectural and industrial coatings and thermoset composites industries; Inhance Technologies, a leading provider of unique plastic barrier, adhesion and surface enhancement products and services as well as a manufacturer of value-added materials; Royal Adhesives & Sealants, the largest global pure-play producer of proprietary, high-performance adhesives, sealants and coatings. Previous investments in the sector include Novolyte Technologies, Genovique Specialties, Velsicol Chemical, Sermatech International, and Vertellus Specialties.

Kirkland & Ellis LLP acted as legal advisor to Arsenal. KeyBanc Capital Markets and Madison Capital Funding LLC provided senior debt financing, and funds managed by Sankaty Advisors and Metropolitan Life Insurance Company provided subordinated debt financing for the transaction. Simmons & Company International served as exclusive financial advisor to Danlin in the transaction. Morse, Barnes-Brown & Pendleton, PC served as legal counsel to the shareholders of Danlin in the transaction.

About Arsenal Capital Partners
Arsenal Capital Partners is a leading New York-based private equity firm that invests in middle-market specialty industrial and healthcare companies. Arsenal makes investments in sectors where the firm has significant prior knowledge and experience. Arsenal targets businesses that have the potential for further value creation by working closely with management to accelerate growth and leverage the firm’s operational improvement capabilities. Arsenal currently has $1.7 billion of committed equity capital.

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