Sun Capital books $1bn plus exit on specialty chemicals company

Sun Capital will sell Emerald Performance Materials to American Securities for a 9x return.  

Florida-based Sun Capital Partners will exit its investment in specialty chemicals company Emerald Performance Materials to American Securities. The deal will amount to more than $1 billion according to people familiar with the matter.

The transaction is subject to regulatory approvals and is expected to close in the third quarter of this year.

Sun Capital declined to comment on financial terms of the transaction.

Sun Capital created Emerald out of a corporate carve-out involving non-core businesses from Lubrizol in 2006. With Sun Capital’s backing, Emerald reconfigured parts of its manufacturing operation toward specialty products.  Strategic add-on acquisitions including CVC Specialty Chemicals and DSM Special Products expanded operations and EBITDA. Emerald is based in Cuyahoga Falls, Ohio.

The transaction is Sun Capital’s fifth exit this year. Last year, the firm completed eight exits and two successful IPOs totaling more than $1 billion in realizations in 2013.  

American Securities was in the news earlier this week for its acquisition of Michigan-based Grede Holdings, an iron castings supplier for automakers. American Securities acquired Grede from Wayzata Investment Partners, for an undisclosed sum.  

American Securities was recently in the market for with its third distressed debt investment vehicle which had raised $778.4 million as of the start of this year, according to Private Equity International’s research and analytics division.