For Immediate Release
Sovereign Specialty Chemicals, Inc. Acquired by Henkel Corporation
Lake Forest, Illinois, January 2005Waud Capital Partners, L.L.C (“WCP”) is pleased to announce the sale of its portfolio company, Sovereign Specialty Chemicals (“Sovereign” or "the Company”), to Henkel Corporation for a transaction value of approximately $575 million. Sovereign, now a wholly owned subsidiary of Henkel, was founded by Waud Capital Partners and Bob Covalt, one of the leading executives in the specialty chemical industry.
In January of 2000, Sovereign was recapitalized in a $360 million transaction. At that time, Waud Capital Partners sold a significant portion of its interests but retained 20% of its investment in the newly recapitalized company. The sale of 100% of Sovereign to Henkel for more than 11X cash flow has allowed WCP to achieve liquidity on its remaining investment. “This has been an extraordinarily successful investment for our investors and has demonstrated the continued success of our approach of identifying attractive industries, partnering with exceptional management teams and executing on our plan to create value and then realize that value for our investors,” said Reeve Waud, Managing Partner of Waud Capital Partners. As a result of the sale, WCP’s two funds which invested in Sovereign achieved an annualized gross internal rate of return on the investment of 56% and 38%.
The Chicago-based Sovereign was founded in 1996 to acquire specialty chemical businesses in the highly-fragmented adhesives, sealants and coatings industries. By focusing on niche products in attractive markets, Sovereign quickly grew to more than $375 million in revenues and more than $50 million in EBITDA. The Company became the largest privately owned adhesives manufacturer in the United States and one of the largest adhesives manufacturers in the world. The Company achieved substantial operational savings through on-site management, reorganization/cost improvements, focused research and development and technical service.
About Waud Capital Partners, L.L.C.
WCP is focused on partnering with exceptional management teams to invest in middle market buyouts, recapitalizations, industry consolidation and growth equity investments. The firm seeks to invest $10 million to $50 million in private companies in the following four areas: business and consumer services, healthcare services, industrial/specialty distribution and niche manufacturing businesses. Typically, the companies in which WCP invests have enterprise values between $30 million and $150 million. Since its founding, Waud Capital Partners has successfully made more than sixty investments, without a single capital loss, in a wide range of industries, including adhesives, alarm monitoring, automotive components, coatings, consumer products, lighting, litigation services, petroleum distribution, pharmaceuticals, publishing, sealants and specialty hospitals. The firm is backed by a number of institutions, including Citigroup, Middlebury College, SunAmerica, The St. Paul Travelers Companies and the University of Chicago Hospitals, among others, as well a number of well-known families and high net worth individuals.