Sector News

SK Capital reinvests in Archroma

August 21, 2017
Chemical Value Chain

SK Capital Partners, a private investment firm with a disciplined focus on the specialty materials, chemicals and pharmaceutical sectors, announced today that it is reinvesting in Archroma in support of the Company’s ongoing initiatives to drive innovation, growth and operational efficiencies and to pursue strategic investments in both organic growth and industry consolidation.

Initially acquired by SK Capital in 2013, Archroma is a global, diversified provider of specialty chemicals serving the branded and performance textiles, packaging and paper, and coatings, adhesives and sealants end markets. The Company is headquartered in Switzerland and operates a highly integrated, customer focused platform that delivers products in over 100 countries.

Under SK Capital’s ownership, the Company has revitalized its performance, having carved out three noncore divisions and establishing them as an independent and integrated company, installing an experienced and talented management team, and facilitating a cultural transformation that has resulted in Archroma becoming a leading participant in their sectors. The Company has generated increased profitability and cash flow by improving capacity utilization, creating an integrated supply chain to simplify product flow, reducing corporate complexity by de-layering organizational structures, and improving key business processes.

Barry Siadat, Managing Director of SK Capital, said, “We are excited to be making this new investment in our existing portfolio company, Archroma. We believe there is an opportunity going forward to deliver new product innovations by capitalizing on significant investments made in new technologies that improve sustainability, enhance performance and create new features and benefits coveted by our customers in the branded textiles, packaging and coatings and adhesives markets.”

Aaron Davenport, Managing Director of SK Capital added, “We believe Archroma is in a strong position to be a leading market consolidator in these fragmented sectors by executing on a number of attractive acquisition opportunities that can leverage the Company’s existing platform and technology base. Our new equity investment and recapitalized balance sheet will provide the financial and operational flexibility needed to continue building Archroma’s competitiveness and market position.”

As part of the investment, Archroma completed an offering of its credit facilities including a multi-currency revolving credit facility, a facility for capital expenditures, and term loans. HSBC Bank plc and Bank of America Merrill Lynch International acted as global coordinators, bookrunners and mandated Lead Arrangers. Credit Suisse AG, UBS AG and ICICI Bank UK plc acted as mandated lead arrangers.

Kirkland & Ellis served as legal counsel to SK Capital. The Valence Group provided SK Capital with a fairness opinion associated with its reinvestment, and Evercore and HSBC provided SK Capital and Archroma with M&A advisory services.

Source: SK CAPITAL

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