Arsenal Deals Novolyte

Cleveland-based lithium batteries component maker Novolyte Technologies has been acquired by BASF, providing New York-based private equity firm Arsenal Capital Partners an exit. The company carved Novolyte out of Ferro Corp. in 2008; specifics of the deal were not publicized.

PRESS RELEASE:

NEW YORK, April 26, 2012 – Arsenal Capital Partners, a leading New York-based private equity firm that invests in middle-market specialty industrial, healthcare, and financial services companies, announced today the sale of its portfolio company Novolyte Technologies to BASF.

Novolyte is a world leading manufacturer and supplier of specialty electrolytes for lithium ion batteries and high performance solvents. Arsenal acquired Novolyte in 2008 in a corporate carve-out from Ferro Corporation as part of the Arsenal’s strategy to participate in the rapidly growing energy storage end markets. Arsenal saw a transformational opportunity for the company to leverage its niche products driven by growing long-term demand.

“This successful transaction is the culmination of our strong partnership with the Novolyte management team and Foosung, our joint venture partners in Korea,” said John Televantos, a Partner at Arsenal and Co-Head of the firm’s Specialty Industrials Group. “Three years ago we took a mis-positioned corporate asset and shifted its focus towards higher growth applications to create a differentiated global business.”

Based in Cleveland, Novolyte’s products include electrolytes and materials used for lithium batteries, ultracapacitors and other energy storage devices, solvents used in a variety of industrial processes and products, electronic materials, polymer ingredients, pharmaceutical and agricultural chemicals. The company’s products and technology solutions are an integral part in the emerging growth of lithium batteries for hybrid electric (HEV) and electric vehicles.

“The support from Arsenal Capital has been critical to the growth of Novolyte over the past three years and their expertise in the specialty industrials sector and our industry in particular, helped build Novolyte into a global leader in its industry,” said Edward Frindt, CEO of Novolyte.”

“Arsenal grew Novolyte by implementing a number of strategies, including strengthening the technology and marketing effort and establishing a successful joint venture with a leading Asian partner in Korea,” added Tim Zappala, Partner at Arsenal and Co-Head of the firm’s Specialty Industrials Group. “We achieved our investment goals as a result of a strong partnership with management, we thank them for their support and wish them well as part of BASF as the business continues to innovate and grow.”

In addition to Novolyte, Arsenal’s investments in the specialty industrials sector include Royal Adhesives & Sealants, a leading producer of proprietary, high-performance adhesives, sealants and coatings; Charter Brokerage, a premier non-asset based third party logistics provider to the petroleum and petrochemical industries; Source Refrigeration & HVAC, the leading independent provider of commercial refrigeration services in North America and DG3, a leading, global provider of commercial printing and graphic communication services. Previous investments in the sector include IDQ Holdings, Genovique Specialties, Sermatech International, and Vertellus Specialties.

About Arsenal Capital Partners
Arsenal Capital Partners is a leading New York-based private equity firm that invests in middle-market specialty industrial, healthcare and financial services 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 $800 million of committed equity capital. For additional information on Arsenal Capital Partners, please visit www.arsenalcapital.com.