Palladium Equity bags Reading Alloys for $250m

As one of few to lock down financing amidst the covid-19 turmoil, the PE firm’s specialty materials company Kymera manages to clinch a sizable add-on.

In a bid to build out existing platform Kymera International, Palladium Equity Partners has snapped up Reading Alloys in a deal valued at $250 million, PE Hub has learned.

Reading Alloys, a specialty materials company serving the aerospace, defense and medical markets, records annual sales of $150 million to $160 million, a source close to the deal said.

The purchase price for Reading Alloys, Kymera’s third acquisition to date, matches industry averages, the source added.

The deal, signed last year following an auction process, managed to secure financing despite virus-induced market fears, Adam Shebitz, a partner at Palladium, told PE Hub.

Goldman Sachs led financing for the acquisition, which closed on Friday. The underwriting partners include HSBC, Key Bank and M&T Bank.

Given the environment, “I didn’t take it for granted that the financing was going to close,” Shebitz said, clarifying that closing the financing would have been a pretty mundane event otherwise.

Palladium acquired Kymera in 2018 with the intention to diversify the business through add-ons.

Even before acquiring Kymera, “we had a thesis to consolidate the market and tasked the management team to find the right target,” said Shebitz.

Kymera manufactures powder pastes and granules of aluminum, copper, tin, and zinc for a range of industries. Reading Alloys creates specialized alloys that are used to make aircrafts lighter and fuel-efficient. Customers include the likes of Boeing’s Dreamliner.

Given that Kymera already supplies raw material to Reading Alloys, Shebitz said, “this would be a relatively easy deal to integrate.”

Headquartered in New York, Palladium is a middle-market private equity firm with approximately $3 billion assets under management.

Action Item: Check out Palladium’s latest Form ADV.