Monomoy scores 5x chemical exit

The firm has sold specialty chemical producer SRC and has closed its second fund on $400m, exceeding its $350m target.

Monomoy Capital Partners has sold specialty chemical producer SRC to Buckingham Capital and Stelaris Capital, generating a 5x return on the firm's initial investment of undisclosed size in 2007.

The exit comes just as New York-based Monomoy closes its second fund on $400 million, exceeding its $350 million target.

SRC produces fused magnesium flux, a chemical component used in the production of magnesium and aluminium alloys. Monomoy spun SRC out of Compass Automotive Group, a portfolio company the firm built out of four underperforming businesses in the automotive supply chain.

“What got us interested in [SRC] in the first place was certainly the automotive business, but what interested us even more about this business was it was incredibly stable,” partner at Monomoy Justin Hillenbrand told PEO. “It's certainly a space that we'll continue to be interested in.”

Monomoy hired investment bank Lincoln International to run the auction for SRC.

Monomoy's second fund is focused on distressed and turnaround investments. The firm used MVision Private Equity Advisors as a placement agent, and secured commitments from a majority of its existing limited partners as well as new investors from Europe and the US.

Approximately 34 percent of Fund II commitments came from public and corporate pension funds, 33 percent from funds of funds, 23 percent from endowments, family offices and foundations; and 9 percent from insurance companies.

In March, Monomoy received a $40 million commitment from The Ohio School Employees Retirement System.

Monomoy collected $280 million for its debut fund in 2007, exceeding its target of $200 million. The firm spun out of KPS in 2005 to concentrate on the smaller end of the mid-market. Monomoy targets companies with $70 million to $400 million in revenue and aims to make equity investments of $10 million to $50 million.