Flowchem sale to specialty chemicals company KMG completed
NEW YORK — Arsenal Capital Partners completed the previously announced sale of its portfolio company Flowchem, a manufacturer of pipeline performance products, to KMG, a global provider of specialty chemicals, for $495 MM.
Founded in 2001 and based in Waller, Texas, Flowchem is a global provider of drag-reducing additives (DRA), related support services and equipment to midstream crude oil and refined fuel pipeline operators. Flowchem manufactures a broad family of DRAs, enabling the company to provide the most appropriate and effective DRA for its customers' needs. Flowchem's products include DRAs for light, medium or heavy crude oil, as well as DRAs engineered for refined fuel products and custom-engineered DRA solutions formulated to optimize any pipeline.
"Flowchem is an example of Arsenal's Specialty Industrials focus on building and growing solution-oriented businesses with differentiated technologies,” said John Televantos, Arsenal Partner and Co-Head of Arsenal's Specialty Industrials Group. “Through its technology and market-focused approach, the Company has supported the global pipeline industry in reducing costs and enabling the more effective transportation of oil. We are very pleased with the growth that Flowchem has generated during our ownership and with the management team's contributions in this successful outcome."
The sale of Flowchem represents the third sale by Arsenal Fund III in the last 12 months, following the sale of Kel-Tech, a manufacturer and supplier of oilfield production chemicals and services throughout the United States, to Clariant and Chromaflo Technologies, a leading producer of proprietary, high-performance colorants and chemical dispersions, to American Securities.
KeyBanc Capital Markets acted as exclusive financial advisor, Kirkland & Ellis LLP and Jones Day LLP acted as legal advisors and ADI Analytics LLC provided advisory services to Flowchem and Arsenal.
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