Information on the Target

Applied Products, Inc., known as APPLIED Adhesives, is a leading provider of adhesive solutions catering to various markets, including packaging, product assembly, paper converting, and automotive sectors. The company functions as a value-added distributor of a diverse range of adhesives—hot melt, water-based, and structural—along with dispensing equipment. APPLIED Adhesives plays a vital role in the supply chain for several notable adhesive manufacturers and formulators, offering extensive reach, superior service levels, and deep technical expertise to an expansive customer base. Additionally, the company boasts a robust portfolio of private label adhesives and equipment under multiple brands such as ASURE, Adhezion, InfinityBond, Pacific Adhesives, AST Equipment, and KEYSTONE.

Industry Overview in the Target’s Specific Country

The adhesive industry is witnessing substantial growth globally, spurred by technological advancements, increased demand from various end-use industries, and rising awareness of sustainable and eco-friendly products. In the U.S., the market has been particularly resilient, driven by trends in packaging, construction, and automotive. Significant investments in product innovation and digitization have enabled companies to enhance operational efficiencies and customer engagement.

Recent years have seen heightened activity in mergers and acquisitions within the adhesive sector, indicating a trend towards consolidation as companies seek to broaden their product offerings and customer reach. The increasing complexity of adhesive applications necessitates more technical expertise, positioning companies like APPLIED Adhesives favorably in the market.

With the continuous expansion of e-commerce and advanced manufacturing processes, the demand for high-performance adhesives is expected to surge. This is particularly relevant for industries focusing on sustainability, which drives the need for high-quality binding solutions and innovative product ranges.

Furthermore, regulatory changes and the emphasis on safety and performance are compelling adhesive manufacturers to diversify and adapt their product lines, which presents opportunities for agile distributors capable of meeting these evolving market needs.

The Rationale Behind the Deal

The sale of APPLIED Adhesives to Bertram Capital represents a strategic transition aimed at leveraging Bertram’s resources and network to accomplish further growth. During its tenure under Arsenal Capital Partners, APPLIED Adhesives achieved remarkable growth, nearly tripling its sales and successfully integrating multiple strategic acquisitions. This transaction allows APPLIED Adhesives to utilize Bertram’s expertise and capital for future expansions and enhancements of its product portfolio.

Moreover, the deal reflects Arsenal’s successful investment strategy, having multiplied the value of APPLIED Adhesives through organic growth and acquisitions. The partnership with Bertram is anticipated to open new pathways for market penetration and technological advancements, ensuring continued progress and competitiveness in the adhesive space.

Information About the Investor

Bertram Capital is a growth-focused private equity firm dedicated to creating value through strategic support and partnerships. It specializes in building companies by investing in market-leading firms across various sectors. With a strong focus on operational improvements and unlocking potential within robust companies, Bertram aims to facilitate scale and drive market leadership. The firm’s investment philosophy centers on partnering with management teams to enhance business operations and execute growth strategies effectively.

Through previous investments, Bertram Capital has developed a track record of identifying high-potential businesses in both the industrial and technology sectors. Their keen ability to identify opportunities for innovation and expansion aligns well with APPLIED Adhesives' growth ambitions as it embarks on this new chapter.

View of Dealert

The acquisition of APPLIED Adhesives by Bertram Capital appears to be a sound investment move, considering the company's robust growth trajectory and strategic positioning within the adhesive market. Bertram's expertise in scaling businesses sets a promising foundation for APPLIED Adhesives to explore new market opportunities and enhance its product offerings further. The prior growth under Arsenal’s investment indicates a solid operational framework that Bertram can build upon.

Moreover, the adhesive industry's growth drivers, including technological innovation and an increasing focus on sustainable solutions, suggest that APPLIED Adhesives is well-positioned to capture emerging opportunities and meet evolving consumer demands. Bertram's investment could also facilitate accelerated digitalization and efficiency improvements, critical factors for competitiveness in today's market.

In conclusion, this deal not only signifies a strong exit for Arsenal but also paves the way for APPLIED Adhesives to thrive under Bertram Capital's stewardship. With a focus on targeted expansion and product innovation, the potential for future success is considerable. Overall, the investment is likely to be beneficial for both the investor and the acquired company, given the favorable market conditions and growth potential in the adhesive sector.

View Original Article