Target Company Overview

Accella Polyurethane Systems LLC (“Accella”) has announced an agreement to acquire select assets of the North American spray polyurethane foam (SPF) business from Covestro LLC. This acquisition is scheduled for completion by April 1, 2017, with financial terms remaining undisclosed. The purchase is anticipated to bolster Accella's standing in the SPF market and represents a strategic initiative in their history of consolidating leading companies in the polyurethane sector.

Andy Harris, Accella’s president and CEO, emphasized that the acquisition will enhance their existing product technology portfolio and leverage a skilled team of industry professionals. Accella is dedicated to expanding its spray foam business to provide top-tier products and services to its customers.

Industry Overview in North America

The North American spray polyurethane foam industry plays a critical role in the construction sector, primarily serving as insulation and roofing materials for both residential and commercial structures. SPF is gaining traction due to its superior insulating properties, energy efficiency, and environmental benefits, which resonate with contemporary construction trends toward sustainability and energy savings.

In recent years, market growth has been driven by a surge in construction activities, particularly in the residential space. Reports indicate a growing preference for SPF as an insulation choice, attributed to its versatility and effectiveness in minimizing energy consumption. Market players are also benefitting from increasing regulations advocating for energy-efficient building practices.

Furthermore, technological advancements within the industry have led to innovations that enhance the performance of SPF products. Manufacturers are investing in research and development to produce formulations that are not only efficient but also environmentally friendly, catering to the rising demand for sustainable construction materials.

As the North American SPF market continues to evolve, key players are positioning themselves to capture growing market share by focusing on product diversity and customer engagement, aiming to address the unique needs of various market segments.

Rationale Behind the Deal

The acquisition of Covestro's SPF assets is a strategic maneuver for Accella, allowing the company to solidify its leadership position in the polyurethane market. This deal is expected to enhance their overall capabilities, enabling Accella to provide a more comprehensive range of solutions to its customers.

With the integration of Covestro’s established expertise and product offerings, Accella anticipates increased market penetration and improved service delivery. The initiative aligns with their long-term goal of establishing a robust portfolio that meets the evolving demands of the construction industry.

Investor Information

Arsenal Capital Partners, the investor backing this acquisition, is a prominent private equity firm based in New York. Established in 2000, Arsenal specializes in middle-market investments within the specialty industrials and healthcare sectors. The firm has raised approximately $3 billion in institutional equity funds, demonstrating significant experience and success in nurturing companies with high growth potential.

Arsenal Capital seeks to partner with management teams to create strategically important companies that maintain leading market positions. Their investment strategy is focused on organizations with an enterprise value between $100 million and $500 million, making them well-suited to support Accella’s growth and expansion objectives.

View of Dealert

The acquisition of Covestro's SPF assets presents a promising investment opportunity for Accella. By integrating these assets, Accella can enhance its operational capabilities and expand its market reach, positioning itself as a leading provider in the polyurethane sector.

This deal is likely to yield substantial synergies, as Covestro’s existing operations will complement Accella’s long-term strategic vision. Additionally, the presence of skilled professionals from Covestro will enrich Accella’s talent pool, fostering innovation and improved service execution.

The strategic focus on spray foam represents a timely response to the escalating demand for effective insulation solutions in the construction industry. Given the current trends towards energy efficiency and sustainability, Accella's commitment to expanding its SPF offerings places it in an advantageous position to meet market needs.

In conclusion, this acquisition could significantly strengthen Accella's market position and operational efficiency, making it a sound investment that is poised to drive future growth and profitability.

View Original Article