Private equity investment firm Golden Gate Capital, San Francisco, is exploring the sale of ArrMaz Custom Chemicals, Mulberry, Fla., according to Bloomberg, citing people with knowledge of the matter. The deal could fetch about $580 million based on similar valuations in the industry, according to the sources.
Founded in 1967, ArrMaz, which Golden Gate purchased in 2013 (GM Jan. 14, 2013), is a specialty chemicals producer for the mining, fertilizer, phosphate, industrial ammonium nitrate, asphalt, and oil and gas industries. It serves customers globally from multiple locations across North and South America, Europe, Asia, Africa, and the Middle East.
ArrMaz chemicals are used to help process the breakdown of phosphate, and sources said Golden Gate is looking to cash in on the growing phosphate mining industry. When it bought the company, Golden Gate cited ArrMaz’s unique market leadership position, significant competitive advantages, and long-term growth potential. Golden Gate has since added other assets to the ArrMaz footprint, including the 2017 purchase of MaxxChem, an asphalt additive maker.
ArrMaz generates about $300 million in annual revenue and $60 million in annual EBITDA, the sources told Bloomberg. By comparison, Innospec Inc., Littleton, Colo., a competitor in mining chemicals, currently trades at 9.72 times next year’s EBITDA.
Golden Gate is working with Lazard Ltd. to seek buyers. Both declined to comment. ArrMaz did not have a representative immediately available to comment.