SK Capital, Which Pulled $922 Mln Ascend Dividend Last Year, Acquires Calabrian

Today, SK Capital Partners recapped Calabrian Corp., which provides water treatment chemicals.

Financial terms were not disclosed. SK Capital, a private investment firm with offices in New York and Boca Raton, Fla., will have a majority stake in Calabrian. CEO Charles Cogliandro will have a minority stake, or less than 30%. Cogliandro is also staying on as CEO, says Jack Norris, an SK Capital MD.

The Cogliandro family was the sellers. Succession was an issue but the deal was more a diversification of family assets, says Norris. “There were a number of family members that were shareholders but were no longer involved in the business,” says Norris. “By doing a recap, we were able to provide liquidity to selling shareholders as well as put in a capital structure.”

Wells Fargo is providing debt financing. The deal closed April 30. “This is a business with a great market opportunity in front of it,” Norris says of Calabrian. “It’s very well run.”

SK Capital did not use an outside financial advisor for the buy. Instead, SK spent two years putting together a transaction with the family. “We approached them,” Norris says. “Barry Siadat and myself. We spent a lot of time in the chemical and materials sector.”

Calabrian makes sulfur dioxide and downstream derivatives including sodium sulfite, sodium bisulfite and sodium metabisulfite at its plant in Port Neches, Texas. The products are used in industrial and municipal wastewater treatment applications. Calabrian, which employs 68 people, will serve as a platform deal for SK Capital, Norris says. The firm plans to grow Calabrian’s business and execute one or more strategic opportunities, he says.

SK gained notoriety last fall when it tried to take a $922 million dividend from portfolio company, Ascend Performance Materials. The firm had only owned Ascend for roughly a year. SK Capital ended up pulling the massive dividend.

SK Capital typically invests $40 million to $50 million equity per transaction. Calabrian will be SK’s third portfolio company. The firm acquired Aristech Acrylics from Mitsubishi in 2008. SK then bought Ascend in June 2009.