Plastics group A. Schulman (Nasdaq: SHLM) is buying Citadel Plastics from private equity firms HGGC and Charlesbank Capital Partners for $800 million.
Citadel, headquartered in West Chicago, Illinois, provides thermoplastic and engineered composite compounds. The business has 21 production facilities in North America, Europe, Asia and Latin America and provides products to the transportation, industrial, construction, consumer, electrical, energy, health care and safety markets. The company is led by HGGC's Gary Crittenden as chairman.
The purchase price works out to roughly 10.6x the company's Ebitda of $75 million.
A. Schulman, headquartered in Akron, Ohio, provides plastic compounds to the packaging, mobility, building, and other markets. The company says the acquisition adds to its thermoplastics unit, and helps it diversify beyond just plastic compounding.
HGGC, which has a controlling stake in the business, and Charlesbank invested in Citadel in 2012. Under PE ownership, Citadel acquired Lucent Polymers, a specialty-compounds manufacturer in 2013, and the Composites Group, a fiberglass and composite business, in October. The firms say Citadel grew revenues by 70 percent since their investment.
This is Palo Alto, California-based HGGC's 11th exit from its initial $1.1 billion fund, and the firm's first deal of the year. The middle-market private equity firm closed its second fund with $1.33 billion in capital commitments earlier in March.
Boston and New York-based Charlesbank is a middle-market private equity firm with more than $3 billion in capital under management. The firm usually invests between $50 million and $150 million per deal.