Detroit-based Huron Capital announced Wednesday that it has sold its interest in Quest Specialty Chemicals Inc. in a transaction that produced 4.1 times its original 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 million fund which had its final close in May 2005.
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, Wis., and additional manufacturing and warehousing centers in Walled Lake, Charleston, S.C., and Phoenix, 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 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 more than 200 acquisition opportunities and enjoyed sales and EBITDA growth of 426 and 481 percnet respectively.
“This transaction marks the realization of a core position for the fund,” said Huron partner Mike Beauregard. “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.”
Huron Capital is one of the leading operationally-focused private equity firms investing in lower middle-market companies. The firm typically invests up to $70 million to sponsor buyouts, growth initiatives, corporate spin-offs and recapitalizations of niche manufacturing, specialty service, and value-added distribution companies having revenues up to $300 million. Huron seeks opportunities where it can help companies reach their full potential by combining its operational approach, capital and transaction experience with proven operating executives who have the vision, experience, and commitment to grow their businesses.
Founded in 1999, Huron has acquired or invested in 49 companies with aggregate revenues approaching $1 billion. Investments have been made in the United States and Canada in a variety of areas, including document management, education, healthcare products & services, specialty chemicals, specialty packaging, consumer products, home décor, passenger transportation services, building products, office furniture components and laboratory testing.
Huron Capital currently manages over $600 million in committed equity through three private equity funds, and has offices based in Detroit and Toronto. The firm has consistently generated top-quartile returns for its limited partners. For more information, visit www.huroncapital.com.