Arsenal Capital Partners has closed its previously announced sale of Waller, Texas-based Flowchem, a maker of pipeline performance products to KMG for $495 million. KeyBanc Capital Markets provided financial advice to Arsenal and Flowchem on the deal.
NEW YORK, June 15, 2017 – Arsenal Capital Partners (“Arsenal”) today completed the previously announced sale of its portfolio company Flowchem (“Flowchem” or the “Company”), a leading manufacturer of pipeline performance products, to KMG (NYSE: KMG), a global provider of specialty chemicals, for $495 million.
Founded in 2001 and based in Waller, Texas, Flowchem is a leading global provider of drag-reducing additives (“DRA”), related support services and equipment to midstream crude oil and refined fuel pipeline operators. Flowchem manufactures a broad family of DRAs, enabling the company to provide the most appropriate and effective DRA for its customers’ needs. Flowchem’s products include DRAs for light, medium or heavy crude oil, as well as DRAs engineered for refined fuel products and custom-engineered DRA solutions formulated to optimize any pipeline.
“Flowchem is an example of Arsenal’s Specialty Industrials focus on building and growing solution-oriented businesses with differentiated technologies. Through its technology and market-focused approach, the Company has supported the global pipeline industry in reducing costs and enabling the more effective transportation of oil. We are very pleased with the growth that Flowchem has generated during our ownership and with the management team’s contributions in this successful outcome,” said John Televantos, Arsenal Partner and Co-Head of Arsenal’s Specialty Industrials Group.
Roy Seroussi, Principal at Arsenal, added, “Since our initial investment in 2013, Flowchem increased its global sales footprint, broadened its portfolio of solutions into new markets and expanded its manufacturing capabilities to drive growth. We would like to thank the management team and the employees for their commitment to Flowchem’s growth over the last four years.”
The sale of Flowchem represents the third sale by Arsenal Fund III in the last 12 months, following the sale of Kel-Tech, a manufacturer and supplier of oilfield production chemicals and services throughout the United States, to Clariant and Chromaflo Technologies, a leading producer of proprietary, high-performance colorants and chemical dispersions, to American Securities.
KeyBanc Capital Markets acted as exclusive financial advisor, Kirkland & Ellis LLP and Jones Day LLP acted as legal advisors and ADI Analytics LLC provided advisory services to Flowchem and Arsenal.
About Arsenal Capital Partners
Established in 2000, Arsenal Capital Partners is a leading New York based private equity firm that specializes in investments in middle market specialty industrials and healthcare companies. Since inception, Arsenal has raised institutional equity investment funds of approximately $3 billion. Arsenal invests in industry sectors in which the firm has significant prior knowledge and experience and seeks companies typically in the range of $100 – $500 million of initial enterprise value. The firm works with management teams to build strategically important companies with leading market positions, high growth, and high value-add. For additional information on Arsenal Capital Partners, please visit www.arsenalcapital.com.