Financial terms weren’t announced. Audax and Moelis will have 50-50 shared control, said Geoffrey Rehnert, Audax’s co-CEO, in an emailed response to questions.
Huron, a Detroit PE firm, has sold all of its majority stake in Quest, Rehnert said. He declined to disclose how much Audax invested in the deal, which closed yesterday.
GE Antares Capital and BMO Capital Markets led the senior debt financing. Oaktree Capital led the mezzanine financing, according to a statement.
“Quest is a diversified specialty chemical manufacturer with a leading position as a scale player within its niches,” Rehnert said in the statement.
No job cuts or management changes are planned, Rehnert said.
Huron’s investment dates back to November 2004 when the buyout shop acquired Quest. Menomonee Falls, Wis.-based Quest makes paint for automotive and touch-up applications. Quest was Huron’s first investment from its second fund, for which it raised $185 million in May 2005, according to a statement.
Quest acquired seven companies while it was owned by Huron, including Matrix Systems, Raabe Corp. and Foxcolor. Sales, during this time period, grew 426% while EBITDA jumped 481%, Huron said. With the sale, Huron made 4.1x its original investment, the PE firm said in a separate announcement.
Audax, which has offices in Boston and New York, targets small cap and lower middle market companies. It typically invests $10 million to $100 million equity per deal. The investment in Huron came from Audax’s third PE fund, which raised $1 billion in 2007.
Moelis Capital Partners, the PE arm of Moelis & Co., usually invests $25 million to $100 million per deal.
UBS advised Quest. Moelis & Co. served as financial advisor to the buyers.
Officials for Quest couldn’t be reached for comment.