Sale of the Specialty Paint & Coatings Roll-up Quadruples Huron’s Invested Capital
Detroit, MI – March 23, 2011 // Huron Capital announced today that it has sold its interest in Quest Specialty Chemicals, Inc. (“Quest” or the “Company”) in a transaction that returned 4.1 times its investment. In order to give effect to the transaction, Quest was recapitalized by Audax Group, Moelis Capital Partners, and Quest management. Huron’s investment in Quest was the 2nd largest equity investment made through The Huron Fund II, LP, a $185,000,000 fund which had its final close in May 2005. UBS Investment Bank advised Quest on the transaction and Honigman, Miller, Schwartz and Cohn served as counsel to Quest.
Founded in 2003 by Huron and chemical industry veterans Frederick Quinn and Gerard Loftus, Quest is a leading specialty chemicals company engaged in the formulation, manufacturing, and marketing of coatings designed to repair, restore, and preserve the assets of its customers. With operations headquartered in Menomonee Falls, WI, and additional manufacturing and warehousing facilities in Walled Lake, MI, Charleston, SC, and Phoenix, AZ, Quest serves a variety of industries, including the automotive aftermarket, general industrial, and commercial re–roofing end markets.
In 2003, Huron entered into a strategic market entry initiative with Messrs. Quinn and Loftus in order to pursue a build–up strategy in the specialty coatings industry. The Quest platform purchased seven companies: Raabe Company (2004), Foxcolor (2005), Matrix System Automotive Finishes (2006), United Coatings (2007), Zolatone (2007), HydroStop (2007) and Custom Finishes (2009). During Huron’s hold period, the business reviewed over 200 acquisition opportunities and enjoyed sales and EBITDA growth of 426% and 481%, respectively.
Mike Beauregard, a Partner with Huron, said, “This transaction marks the realization of a core position for the fund. Fred and Gerry brought a unique combination of corporate development and operating talent to the business. Together, we built the depth of the Quest team methodically with each add-on acquisition. This made Huron comfortable injecting fresh equity into the business on four separate occasions. We are grateful for the dedicated and transformational leadership skills that Fred and Gerry invested into the Company.”