Arsenal Capital Partners said Monday that it has acquired Flowchem Ltd. No financial terms were disclosed. PPHB advised Flowchem in the transaction. Headquartered in Waller, Texas, Flowchem is a specialty chemical provider to the pipeline industry.
NEW YORK, December 9, 2013 – 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 Flowchem Ltd., a leading specialty chemical provider to the pipeline industry.
Founded in 2001, and headquartered in Waller, Texas, Flowchem is a leading provider of Drag Reducing Additives (DRAs) to improve pipeline flow in onshore and offshore pipeline applications. The company’s DRAs reduce drag and turbulence in petroleum pipelines in order to increase throughput capacity and energy efficiency, providing significant cost savings to pipeline operators. Flowchem also provides complementary services and equipment to its global customer base. The company has two operating facilities in Texas.
“We are delighted to have the opportunity to invest in an innovative company with a track record of providing unique solutions and services to the global oil pipeline industry. Flowchem’s high value products are solving problems for the pipeline industry in a time of increasing supply of oil and constrained infrastructure. The acquisition of Flowchem builds on Arsenal’s portfolio and established expertise in the Specialty Industrial sector,” said John Televantos, a Partner who co-heads Arsenal’s Specialty Industrials practice.
“Arsenal is the right partner given their expertise in the chemicals sector. We believe that Arsenal is uniquely capable of supporting the company’s growth in the U.S. and globally. This is a positive development for our customers, employees, suppliers and other partners,” said Steve Erikson, co-founder and CEO of Flowchem.
“We are excited to be partnering with a great leadership team at Flowchem and look forward to continuing their success by providing value added products and services focused on DRAs and complementary offerings,” said Tim Zappala, a Partner who co-heads Arsenal’s Specialty Industrials practice.
The acquisition of Flowchem is the eleventh acquisition by Arsenal and its portfolio companies in 2013, and the ninth by its Specialty Industrials Team, and follows the acquisitions of TP Electrical, Fournier Air Conditioning and Refrigeration, Arnco, Pathway Polymers, ADCO Global, International Fiber Corporation, Fibred Corporation and CPS Color’s Colorants Business.
Flowchem joins Arsenal’s extensive portfolio of investments in the specialty industrials sector.
Arsenal’s current investments in the specialty industrials sector 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.
PPHB acted as financial advisor and Porter Hedges LLP acted as legal advisor to Flowchem. Kirkland & Ellis LLP acted as legal advisor to Arsenal.
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. For additional information on Arsenal Capital Partners, please visit www.arsenalcapital.com.