Verdant

Chemical manufacturer of surfactants, focused on the production of specialty amphoterics and ethoxylates.

  • Significant sales are to the home and personal care sector which includes products that are used for body soaps, shampoos, dishwashing, and household laundry
  • 5 production facilities: University Park, IL, Halifax, UK, Genthin, Germany, Palestine, TX, and Liberty, TX
  • Global production with a North American focus and diverse international customer base of ~100 customers
Acquired:

April 30, 2021

Transaction Type:

Cross-Border, Corporate Carve-Out

Acquired from:

Solvay

Industry:

Chemicals

Headquarters:

Houston, Texas

Source

Competitive Process

Realized:

December 15, 2023

Sold to:

Samyang

Status:

Exited

Transaction Highlights

OpenGate sourced this opportunity through its continuous dialogue and longstanding relationship with Solvay (since 2012) as well as the-sell side investment bank.

Investment Merits:

  • Growth drivers: Long-term growth expected to be steady at GDP+, driven by secular tailwinds
  • Industry attractiveness: Mature and stable end market with blue chip customers
  • Operational improvements: Immediate opportunity to bottom-slice low-margin volumes and shift toward higher-margin business, longer term opportunity to also reduce raw material spend

Value Creation

  • Top-graded management by recruiting and hiring a new C-level executive team including CEO, CFO, CCO, and COO
  • Completed two add-on acquisitions within the first six months of ownership that expanded and diversified Verdant’s product offerings, resulting in a highly attractive product and market portfolio to potential strategic acquirers
  • Executed a complex, multi-national carve-out of three plants from Solvay and implemented a standalone organization and infrastructure in 12 months
  • Implemented a disciplined approach to margin management that focused on value over volume via enhanced analytics, driving significant EBITDA uplift via pricing and service
  • Drove meaningful purchasing savings by leveraging the combined purchasing power of the initial carve-out platform and add-on acquisitions
  • Improved commercial and technical capabilities to focus on building a profitable, solution-driven pipeline

 

This case study is for illustrative purposes only and there can be no guarantee that any of OpenGate’s investments will have similar results.

Exit

  • Samyang Corporation proactively approached OpenGate in late 2022 to acquire Verdant
  • Verdant fit into Samyang’s expansion strategy, as it i) offers specialty batch capabilities, ii) allows Samyang to geographically expand into North America and Europe, and iii) should allow for meaningful synergies through cross-selling and technology transfer
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