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November 30, 2004
Huron Capital Invests in Quest Specialty Chemicals and Acquires Raabe Corporation
Platform Investment Marks First Deal in The Huron Fund II, L.P.
Detroit, MI – November 30, 2004 // Huron Capital Partners LLC, a Michigan-based private equity firm, announced today that it has made the first investment for The Huron Fund II, L.P. (“Fund II”) by capitalizing Quest Specialty Chemicals (“Quest”) in order to facilitate the acquisition of Raabe Corporation (“Raabe”). The investment in Quest was made just four weeks after Huron Capital closed on over $90 million in commitments to Fund II, a fund which Huron is presently raising with a targeted size of at least $150 million. M&I Marshall & Ilsley Bank provided senior debt financing and Harris Nesbitt Capital, Inc. provided subordinated debt financing in the transaction. Consistent with Huron’s strategy of partnering with entrepreneurial and proven industry executives, Huron teamed-up with Frederick A. Quinn and Gerard A. Loftus to build Quest as a platform company in the specialty chemicals industry. In executing the initiative over the past year, Huron and Quest developed a market entry plan to search for and acquire companies that have developed unique solutions to the challenges of surface protection and the bonding of flexible and rigid substrates. These products include coatings, adhesives, polymers and thermoplastic films designed for a wide range of industrial markets. The acquisition of Raabe fits squarely in Quest’s strategy to acquire a business with a strong position in a niche coatings market where Quest could drive organic and acquired growth. Raabe is a leading manufacturer of custom matched branded touch-up paint and a provider of private label aerosol and liquid paint filling services. Raabe’s touch-up products consist of ready-to-apply paints that closely match original equipment coatings and are used to repair the surfaces of industrial & commercial products along all points of the supply chain. Raabe is based in Menomonee Falls, Wisconsin.
Michael R. Beauregard, a Partner at Huron, stated, “We worked with Fred to drive strong deal flow this year in a targeted search effort to find platform chemical businesses. The Quest initiative allowed us to partner with a strong management team first and then be focused on creating investment opportunities in specifically identified companies. In Raabe, we saw a solid core aerosol business serving a niche market with state-of-the-art manufacturing facilities.”
Frederick A. Quinn, Quest’s Chairman & CEO added “Raabe’s strong market share and talented management team are critical assets on which Huron and Quest plan to execute a specialty coatings growth strategy. We expect to make complementary acquisitions in Raabe’s core business lines and to extend their capabilities into new applications. We are also pleased that Mr. David Wacker will continue as President of Raabe.”
Huron and Quest also announced today that Gerard A. Loftus has been appointed COO & CFO of Quest. Mr. Quinn stated “Gerry will focus on the operational and financial aspects of our business. He brings a strong financial background and extensive operational experience in running specialty chemical businesses.” Huron also stated that it elected Carol E. Bramson to Quest’s Board of Directors. Ms. Bramson’s professional experience includes leading Banc One Equity Capital’s successful investment in Sovereign Specialty Chemicals.
About Huron Capital Partners LLC
Huron Capital is one of the leading private equity firms investing in lower middle-market companies. The firm typically invests between $5 million and $20 million in equity to sponsor management buyouts, recapitalizations, and corporate spin-offs of well-positioned companies having revenues up to $200 million. Through its operational approach, Huron’s strategy is to partner with strong management teams at niche manufacturing, specialty service, and value-added distribution companies that can be built through acquisition and organic growth. Huron has been an active investor in 2004, committing over $35 million in equity to three transactions in the past 5 months and successfully realizing strong investment gains from two of its portfolio companies. Since 2000, Huron Capital has acquired 12 companies and has generated top quartile returns for its investors. For further information, please visit Huron’s website at www.huroncapital.com.
About Quest Specialty Chemicals
Quest is led by Mr. Quinn, a 30-year veteran in the specialty chemical industry and who has successfully built, acquired and divested businesses in the specialty chemical industry. He has served as CEO of K.J. Quinn, President of Pierce & Stevens (a subsidiary of Sovereign Specialty Chemicals), and CEO of Royal Adhesives & Sealants. Mr. Quinn is a Graduate of the University of Southern California where he received both his undergraduate and MBA degrees.
For Further Information, Contact:
Mike Beauregard, Partner
(313) 496-1050 | mbeauregard@huroncapital.com