Citadel, which is owned by HGGC and Charlesbank, has agreed to buy The Composites Group from Highlander Partners. No financial terms were disclosed. The deal is expected to be completed by November. William Blair provided financial advice to The Composites Group in the transaction. Headquartered in Highland Heights, Ohio, The Composites Group is a maker of engineered composite compounds.
WEST CHICAGO, IL — October 13, 2014 — Citadel Plastics Holdings, Inc. (“Citadel” or “the Company”), a leading global provider of thermoplastic and engineered composite compounds, today announced that it has signed a definitive agreement to acquire The Composites Group (“TCG”), a top manufacturer of engineered composite compounds, from Dallas, Texas-based Highlander Partners, L.P. The transaction is expected to close by November. Terms were not disclosed.
“TCG is a very strategic acquisition for Citadel, bringing outstanding expertise in material science technology, as is evidenced by its broad portfolio of proprietary engineered composites spanning BMC, SMC,TMC, and high-performance composites,” said Mike Huff, CEO of Citadel. “The addition of TCG, our eighth acquisition since setting out to build a comprehensive materials solution provider, will significantly increase our presence in engineered composites and improve our positioning for future growth with existing and new customers in current and new end markets.”
The Composites Group, headquartered in Cleveland, Ohio, has differentiated itself in the engineered composites industry through its proven ability to formulate, source and utilize high-performance specialty composite materials. By providing customers with an integrated product solution for demanding end-use needs, such as oil and gas, TCG further demonstrates its unique positioning within the engineered composites market.
“The addition of TCG expands Citadel’s ability to fulfill a variety of customer needs across multiple sectors,” said Kevin Andrews, President of Citadel Engineered Composites. “Like Citadel, TCG is critical to its customers’ development initiatives. The combination of experience and greater global scale achieved through this transaction enhances both organizations’ ability to partner with customers to provide innovative technical solutions.”
“The combined businesses of Citadel and TCG create a complementary platform that is well positioned to serve the needs of our collective customer base today and in the future,” said Terry Morgan, CEO of The Composites Group.
The acquisition of TCG will be the eighth plastics-related acquisition for Citadel since 2007 and the 39th overall acquisition since 2008 for HGGC, a middle-market private equity firm with a controlling interest in Citadel. This acquisition, along with the 2013 acquisition of Lucent Polymers, accelerates the evolution of Citadel into a global leader of highly engineered thermoplastic and engineered composite compounds.
“We are very pleased to build on Citadel’s proven ability to grow through strategic acquisitions and integration of successful, complementary businesses,” said Gary Crittenden, Chairman of HGGC, who also serves as Chairman of Citadel. “We’re confident TCG’s blue-chip customer base and financial strength will help Citadel extend its leadership in highly engineered compounds.”
Kirkland & Ellis LLP is legal counsel to Citadel. William Blair & Company, L.L.C. is financial advisor to The Composites Group; Andrews Kurth LLP is serving as its legal counsel.
About Citadel Plastics Holdings, Inc.
HGGC of Palo Alto, California, and Boston-based Charlesbank Capital Partners are the primary owners of Citadel. Citadel is a leading provider of custom material solutions including both thermoplastics and engineered composites products. Citadel’s end markets include automotive, electrical, construction, HVAC, home and garden, appliance and energy. Formed in 2007 and built through a series of cornerstone and tuck-in acquisitions, Citadel’s customer-engineered solutions, stable margin profile, blue-chip customer base and global operational excellence provide attractive opportunities for future growth. Citadel is headquartered in West Chicago, and has a global workforce spread across eighteen plants in seven countries. For more information, visit www.citadelplastics.com.
Based in Palo Alto, California, HGGC is a leading private equity firm focusing on leveraged buyout, recapitalizations and growth equity transactions in the middle-market. HGGC seeks to partner with strong management teams and founders to build companies capable of generating sustainable growth. With years of collective deal and operational experience, HGGC brings best practices from private equity and global corporations to help middle-market businesses in a wide range of industries outperform the market. For more information, visit www.hggc.com.
Based in Boston and New York, Charlesbank is a middle-market private equity investment firm managing more than $3 billion of capital. Charlesbank focuses on management-led buyouts and growth capital financings, typically investing $50 million to $150 million per transaction in companies with enterprise values of $100 million to $750 million. The firm seeks to partner with strong management teams to build companies with sustainable competitive advantages and excellent prospects for growth. For more information, visit www.charlesbank.com.
About The Composites Group
The Composites Group offers a comprehensive portfolio of engineered composite compounds, including high-performance fiberglass and carbon fiber compounds, and parts supported by industry leading research and development capabilities. TCG sells its compounds and complete product solutions to a diverse set of customers across end markets which include aerospace, automotive, defense, electrical, energy, heavy machinery and recreation. TCG is headquartered in Highland Heights, Ohio, with manufacturing facilities located in northeastern Ohio and Bay City, Michigan. For more information, visit thecompositesgroup.com.
About Highlander Partners, L.P.
Highlander Partners, L.P. is a Dallas-based private investment firm with partners that have committed over $800 million of principal funds for direct private equity investments in North America and Central Europe. The firm focuses on making investments in businesses in targeted industries in which the principals of the firm have significant operating and investing experience, including basic manufacturing, food, building materials and others. Highlander Partners uses a “buy and build” investment approach, creating value by helping companies grow organically and through acquisitions. For more information, visit www.highlander-partners.com.