Saratoga Partners, together with Sericol management, has signed an agreement with BP plc, to acquire Sericol as of Dec. 31, 2002.
The transaction was valued at approximately $115 million.
Saratoga Partners, a leading independent New York-based firm, will be the majority shareholder in the new company, while management has a significant minority interest.
Since its founding in 1984, Saratoga has made investments in 29 companies with a value of over $3.4 billion. Saratoga was attracted to Sericol’s global spread, strong customer relationships, excellent product offering, and solutions approach to customer needs.
“After careful study of the company and our position in the industry, Saratoga felt that Sericol was an excellent fit to their portfolio,” said Ed Carhart, Sericol’s CEO. “The sale process also provided the Sericol management team with the time for extensive interaction with Saratoga and eight other private equity firms who were bidding for the business. Throughout the process, we continued to be impressed with the quality of Saratoga’s management and the scope and depth of their experience. In the end, we felt Saratoga was the right fit for Sericol.”
Saratoga Partners executives see Sericol as an ideal addition to its investments.
“Sericol fits very well in our focus area of manufacturing companies with niche characteristics and technological and market leadership,” said Christian Oberbeck, managing director of Saratoga Partners. “It is exactly the kind of company we are looking to invest in because of its outstanding franchise, the strength and commitment of its management team and its prospects for superior earnings growth. Sericol’s successful entry into the wide format digital printing sector has further strengthened its market leading position.”
Sericol is a world leader in the production of premium inks and other consumables for the screen-printing industry, and is a technology leader in such high growth areas as UV screen, flexo and digital inks. It has a strong reputation for its technical support services and customer business programs. The company had sales of $200 million in 2002, and has 1,200 employees worldwide. Sericol’s main manufacturing facilities are in Broadstairs, England and Kansas City, MO. It has other plants in Australia, India, China and Brazil as well as offices in Austria, Canada, the Czech Republic, France, Germany, Hong Kong, Japan, Poland, Mexico, Switzerland, Spain and Taiwan.
Sericol’s existing management team, led by Mr. Carhart, will remain with the company and is participating in the transaction that is expected to close in the first quarter of 2003. Following completion, Sericol will continue to be managed day-to-day by the existing management team, headed by Mr. Carhart.
Operating divisions will be led by Bob Watson, Europe; Mitch Bode, North America; Tony Sleight, AsPac; and Pete Kenehan, Digital. Roy Wiles will continue as financial director, Jerry Avis as business development director and Malcolm Frier as human resources director. This management board will report to a supervisory board led by Saratoga.
Mr. Carhart said that Sericol’s management and BP officials worked well to make the deal occur.
“We’ve been working on this for the past six months,” Mr. Carhart said. “When BP Amoco acquired Burmah Castrol in 2000, BP said it was going to sell its chemicals businesses because it did not fit their portfolio. We knew they would sell us from day one.”
Mr. Carhart is enthusiastic about the opportunities for Sericol in the coming years.
“We now have a partner in Saratoga that is fully aligned, supportive and committed to providing the resources necessary to further grow and expand our business.” Mr. Carhart said. “We have set an ambitious goal for the future of profitably doubling the size of the company over the next five to seven years.
“This will be accomplished through continued growth and expansion in our existing screen business, including traditional graphics as well as industrial and packaging segments,” Mr. Carhart said. “We will also continue our thrust into the wide format digital markets with the aim to become a dominant leading supplier to this fast growing market. While clearly a very stretching goal, I believe we have the talent and the resources to reach and exceed it.”