Profit growth drives sale of PQ - source

01 June 2007 17:48  [Source: ICIS news]

By Joseph Chang

NEW YORK (ICIS news)--Private equity firm CCMP Capital Advisors was able to sell specialty chemicals company PQ Corporation for about double its initial purchase price in just over two years because of a major improvement in its profitability, a source close to PQ said on Friday.

“CEO [chief executive officer] Mike Boyce and his team did a phenomenal job growing the earnings of the business,” the source said to PQ. “They made their money the old fashioned way. It was a good company to start with and they just made it better.”

PQ’s earnings before interest, taxes, depreciation and amortisation (EBITDA) has gained substantially since the buyout.

The purchase price represents a robust multiple of 9.9 times trailing 12-month adjusted EBITDA (as of the first quarter of 2007) of $151.2m (€111.8m).

PQ’s first-quarter EBITDA rose 6% to $37.4m as sales increased 3% to $171.3m. In 2006, EBITDA gained 27% to $149.1m on 12% higher sales of $708.6m.

Private equity firm Carlyle Group has agreed to acquire the specialty inorganic chemicals, catalysts and engineered glass company PQ. for more than $1.5bn from CCMP.

The sale marks a huge success for CCMP, formerly JPMorgan Partners, which bought PQ in February 2005 for about $734m, or around 7 times EBITDA at the time.

CCMP also owns Kraton Polymers with Texas Pacific Group, as well as plastic film companies Pliant and Klockner Pentaplast.

($1 = €0.74)

By: Joseph Chang
+1 713 525 2653

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