Arsenal Capital Partners Sells Applied Adhesives to Bertram Capital in strategic Move
NEW YORK, NY – June 12, 2024 – In a meaningful private equity transaction, Arsenal Capital Partners has finalized the sale of its portfolio company, Applied Products, Inc.(“APPLIED Adhesives”), to Bertram Capital.The deal, which underscores the robust activity in the adhesives market, marks the culmination of Arsenal’s four-year investment in APPLIED Adhesives, during which the company underwent ample growth through strategic acquisitions.
A Strategic Partnership Forged in Growth
APPLIED Adhesives stands as a key player in the adhesive solutions sector, providing comprehensive services to industries spanning packaging, product assembly, paper converting, and automotive. The company acts as an integral supply chain partner for leading adhesive manufacturers and formulators. Arsenal Capital Partners initially invested in APPLIED Adhesives in 2021,setting the stage for a period of expansion and strategic enhancement.
During arsenal’s ownership, APPLIED Adhesives executed an impressive 17 strategic acquisitions, substantially broadening its market reach and service offerings. This aggressive growth strategy positioned the company as an attractive target for acquisition by Bertram Capital, a firm known for its focus on driving transformative growth in industrial and business services companies.
The Driving Forces Behind the Deal
The sale of APPLIED Adhesives reflects several key trends in the U.S.industrial market.First, the demand for specialized adhesive solutions continues to rise across various sectors, fueled by advancements in materials science and manufacturing processes. Second, private equity firms are increasingly seeking to consolidate fragmented industries, creating larger, more efficient, and more competitive entities. strategic acquisitions remain a primary means of achieving rapid growth and market penetration.
“APPLIED Adhesives has established itself as a critical supply chain partner,” said a representative from Arsenal Capital Partners. This highlights the company’s vital role in supporting the operations of numerous businesses across the U.S.economy.
The strategic acquisitions undertaken by APPLIED Adhesives under Arsenal’s ownership likely focused on companies with complementary technologies, customer bases, or geographic reach. This approach is common in private equity-backed roll-up strategies, where the goal is to create a market-leading platform through consolidation. Such as, a similar strategy was employed by Harbour Group in consolidating the HVAC aftermarket parts industry, eventually leading to a successful exit.
The specific terms of the deal between Arsenal Capital and Bertram Capital were not disclosed, but industry analysts estimate the transaction value to be significant, reflecting the strong performance and growth potential of APPLIED Adhesives.
The Legal Framework: Sidley’s Role
Arsenal Capital partners was represented by Sidley Austin LLP, a global law firm with a strong track record in mergers and acquisitions. The Sidley team was extensive, covering various legal areas to ensure a smooth and comprehensive transaction process. Key members of the Sidley team included:
- Christopher rile and Will baker (M&A and Private Equity)
- Ethan McMahon, Conner Collins, and Ryland Ploeger (M&A and Private Equity)
- Steven Rutkovsky, Shayona Schiely, and Megan Bradley (Global Finance)
- Vadim Brusser, Patrick Harrison, Jason Semmes, and Dominique Vletter (antitrust and Competition)
- Sven De Knop, Jen fernandez, Elyssa Kutner, and Alessandra Moroni (global Arbitration, Trade and Advocacy)
- Eric Wolf and Ryan McLeod (Employee Benefits and Executive Compensation)
- eric Grosshandler (Tax)
- Maureen Crough (Environmental, Health, and safety)
- Scott Goldstein (Insurance)
- Eric Hoffman (Labor, Employment, and Immigration)
Sidley’s involvement underscores the complexity of modern M&A transactions, requiring expertise across multiple legal disciplines, including antitrust, finance, trade, and employment law. Their role ensures that the transaction adheres to all applicable regulations and protects the interests of their client.
Bertram Capital’s Perspective and Future Plans
Bertram Capital’s acquisition of APPLIED Adhesives aligns with its investment strategy of partnering with companies that have strong market positions and significant growth opportunities. Bertram is likely to leverage its operational expertise and financial resources to further expand APPLIED Adhesives’ market share and service offerings.
It is anticipated that Bertram Capital will focus on several key areas.These likely include:
- Operational Improvements: Streamlining operations, improving efficiency, and implementing best practices.
- Further Acquisitions: Continuing the roll-up strategy to consolidate the fragmented adhesives market.
- Product Development: Investing in research and development to create innovative adhesive solutions.
- Market Expansion: Expanding APPLIED Adhesives’ geographic reach and entering new markets.
Bertram Capital’s investment in APPLIED Adhesives is a testament to the continued attractiveness of the adhesives market. As industries across the U.S. seek to improve product performance, reduce costs, and enhance sustainability, the demand for advanced adhesive solutions is expected to remain strong. This transaction exemplifies the ongoing trend of private equity firms playing a critical role in shaping the landscape of American industry through strategic investments and acquisitions.
Impact on the U.S. Market
this acquisition has several implications for the U.S. market:
| Area | Impact |
|---|---|
| Competition | Increased consolidation within the adhesives market; potential for greater efficiency and innovation. |
| Supply Chain | Stabilization and potential strengthening of the adhesive supply chain for key industries. |
| Job Market | Potential for job creation through expansion, but also potential for consolidation-related job losses. |
| Innovation | Possible acceleration of innovation in adhesive technologies due to increased investment and focus. |
The acquisition of APPLIED Adhesives by Bertram Capital signifies a strategic move within the industrial sector, promising further growth and innovation. The U.S. market can anticipate continued advancements in adhesive technologies and enhanced supply chain efficiencies, ultimately benefiting various industries and consumers alike.
