Arsenal Capital Partners is purchasing Cyalume Technologies Holdings Inc., a manufacturer of specialty chemicals for use in the pharmaceutical and military sectors, for $45 million in an all-cash transaction. The investment allows Arsenal to leverage its operating experience in the formulated materials sector, according to the firm.
Cyalume serves the pharmaceutical, medical, commercial and military markets with specialty chemicals and other related components. The Ft. Lauderdale, Florida-based target uses its chemical materials to manufacture water proof chemical lights, glow sticks called Snap Lights, tactical ammunition and other related products for militaries and law enforcement agencies, as well as the survival and safety-end markets. Financial terms of the deal, which is expected to close in September, were not disclosed.
“Cyalume has a strong brand and long-term relationships with blue chip customers,” states Sal Gagliardo, an industry and operations partner at Arsenal. “Given its robust portfolio of technologies, we expect that Cyalume will serve as a platform for further acquisitions in the specialty chemicals and performance polymers sector.”
Established in 2000, Arsenal is a lower middle-market private equity firm that targets industrial and healthcare companies with up to $500 million in enterprise value. The New York-based PE firm has raised approximately $3 billion institutional equity investment funds since inception. Arsenal has been active lately. In 2017 alone, the firm sold chemical company Flowchem to KMG Chemicals Inc. (NYSE: KMG) for $495 million and bought specialty polymer producer MFG Chemical Inc.
Specialty chemical businesses have driven many middle-market deals. Related deals include: Littlejohn & Co's acquisition of Cornerstone Chemical Co.; the Jordan Co. LP’s purchase of DuBois Chemicals Inc., a chemical producer for the manufacturing industry, from Aurora Capital Group; Maroon Group LLC’s acquisition of Lincoln Fine Ingredients; Hastings Equity Partners’ acquisition of Impact Chemical Technologies, a chemical maker to the oil and gas industries; and Advent International’s acquiring chemicals producer Viakem SA de CV.
Greenberg Traurig is serving as legal counsel to Cyalume, while Cassel Salpeter & Co. LLC is acting as financial adviser. DLA Piper LLP is serving as legal counsel to Arsenal on the deal.