ILMA Compoundings – December 2019 - 27

platform of products in lubricants,
metalworking fluids, cleaners, water
treatment and other specialty chemicals. The diverse nature of its business
provides many opportunities of pursuit
for its new owners.
In looking at the strategic buyer
universe, there are other quasi-recent
transaction examples of note. After
two years, the Quaker Houghton
transaction finally closed in August.
Also, FUCHS Group recently signed
an agreement to acquire Massachusetts-based Nye Lubricants. The latter
is a clear display of a strategic buyer
stepping up to acquire a stellar business
with strong technology and growth
potential. Nye had been high on the
target list of many strategic buyers and
private equity firms alike. In addition
to the acquisitions of Nulon Products
and Comercial Pacific, FUCHS again
demonstrates its willingness to aggressively pursue good businesses.

Anecdotally, we have witnessed a
marked increase in the number of
inbound inquiries we receive at Grace
Matthews from private equity funds
looking to find a platform in this space.
One recent notable example is Altas
Partners' acquisition of DuBois Chemical. Having previously been owned by
the Jordan Co., DuBois now has a new
growth-oriented partner and a charter
to go out and pursue inorganic growth
opportunities. DuBois has a broad

WHEN TO NOT THROW AWAY
YOUR SHOT
While there exist record levels of capital
and acquisition interest from both strategic buyers and private equity firms, I
tend to agree with Hamilton: "... and
I'm not throwing away my shot."
Most business owners will generally
sell their business once in their lifetime.
Many of the owners that we spoke with
at ILMA's Annual Meeting are beginning to realize the necessity of giving
serious thought on how to optimally
position their companies to increase
value and optionality in a sale process.
As such, they recognize the importance
of being proactive versus reactive when
looking to monetize the value they
have created within their companies.

Spending time upfront to understand both value enhancers and value
detractors, and then appropriately
managing each, can allow an owner
to better capture value and maintain
certainty through the transaction
process. For instance, focusing the
business and marketing materials on
the specialty nature of your operations
can be a strong value enhancer. In
the public markets today, publicly
traded specialty chemical businesses
are valued at approximately 12.7 times
earnings before interest, taxes, depreciation and amortization (EBITDA)
versus 7.8 times EBITDA for commodity chemicals businesses, which is
an approximately five-times difference.
This is the reason that most companies
are trying to drive growth in and
position, or reposition, themselves
as specialty chemical companies. To
ensure this is done accurately, investing the time with the appropriate
advisers now can ensure you find
and extract value while limiting your
downside detractors for when you are
ready to go to market.
"Dear Evan Hansen, today is going
to be a great day and here's why:
because today at least you're you, and,
well, that's enough." In today's market,
there is a buyer for every business. You
can optimize your outcome, though,
by being proactive and prepared
upfront. For those who choose not
to prepare, I fear that, as Wilde said,
"you will never be satisfied ... ."
Scharff is managing director
of Grace Matthews. He can be
reached at 414-278-1120 or
bscharff@gracematthews.com.

27



ILMA Compoundings – December 2019

Table of Contents for the Digital Edition of ILMA Compoundings – December 2019

LETTER FROM THE CEO
INSIDE ILMA
WHAT’S COMING UP
NEW MEMBERS
INDUSTRY RUNDOWN
In the Know
International Insight
Market Report
PEERING INTO THE FUTURE
BREEDING PERFORMANCE
IT’S IN THE DETAILS
BUSINESS HUB
COUNSEL COMPOUND
WASHINGTON LANDSCAPE
IN NETWORK
Member Connections
Cross Connections
PORTRAIT
ILMA Compoundings – December 2019 - Cover1
ILMA Compoundings – December 2019 - Cover2
ILMA Compoundings – December 2019 - 1
ILMA Compoundings – December 2019 - 2
ILMA Compoundings – December 2019 - LETTER FROM THE CEO
ILMA Compoundings – December 2019 - INSIDE ILMA
ILMA Compoundings – December 2019 - 5
ILMA Compoundings – December 2019 - WHAT’S COMING UP
ILMA Compoundings – December 2019 - NEW MEMBERS
ILMA Compoundings – December 2019 - INDUSTRY RUNDOWN
ILMA Compoundings – December 2019 - In the Know
ILMA Compoundings – December 2019 - International Insight
ILMA Compoundings – December 2019 - 11
ILMA Compoundings – December 2019 - Market Report
ILMA Compoundings – December 2019 - 13
ILMA Compoundings – December 2019 - PEERING INTO THE FUTURE
ILMA Compoundings – December 2019 - 15
ILMA Compoundings – December 2019 - 16
ILMA Compoundings – December 2019 - 17
ILMA Compoundings – December 2019 - BREEDING PERFORMANCE
ILMA Compoundings – December 2019 - 19
ILMA Compoundings – December 2019 - 20
ILMA Compoundings – December 2019 - 21
ILMA Compoundings – December 2019 - IT’S IN THE DETAILS
ILMA Compoundings – December 2019 - 23
ILMA Compoundings – December 2019 - 24
ILMA Compoundings – December 2019 - 25
ILMA Compoundings – December 2019 - BUSINESS HUB
ILMA Compoundings – December 2019 - 27
ILMA Compoundings – December 2019 - COUNSEL COMPOUND
ILMA Compoundings – December 2019 - 29
ILMA Compoundings – December 2019 - WASHINGTON LANDSCAPE
ILMA Compoundings – December 2019 - 31
ILMA Compoundings – December 2019 - Member Connections
ILMA Compoundings – December 2019 - 33
ILMA Compoundings – December 2019 - Cross Connections
ILMA Compoundings – December 2019 - 35
ILMA Compoundings – December 2019 - PORTRAIT
ILMA Compoundings – December 2019 - Cover3
ILMA Compoundings – December 2019 - Cover4
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