Arsenal strengthens PU foam business with Covestro unit acquisition

NEW YORK—Arsenal Capital Partners has made another polyurethane foam deal, this time buying part of Covestro L.L.C.'s business in that market for an undisclosed price.

Arsenal is making the deal through its Accella Polyurethane Systems L.L.C. unit. The transaction includes certain assets of Covestro's North American spray PU foam business, which is located in Spring, Texas. The sale is expected to be finalized in the second quarter.

The acquisition "will significantly improve Accella's position in the spray polyurethane foam market and is another strategic step with our positive track record combining the best polyurethane based companies in the industry," Accella President and CEO Andy Harris said in a news release.

"Moving forward, Accella intends to focus on investing in and growing our spray foam business to meet the needs of our valued customers," he added.

Chris Brink, Accella PU systems vice president, added that the firm "will continue to raise the position of [spray polyurethane foam] as the preferred insulation choice in modern residential and commercial construction." The combination "further strengthens Accella's position as the leading independent polyurethane systems house in North America," according to Arsenal partner John Televantos.

The Texas facility employs 40 and includes both commercial and production operations and serves North America as a leading producer of spray PU foam. The material is used as insulation and roofing in the construction of commercial buildings and residential homes.

Covestro L.L.C. President Jerry MacCleary said in the release that the divestiture "will allow [Covestro] to focus on our core business while ensuring our spray polyurethane foam employees can continue to shape the industry as a part of Accella."

Covestro L.L.C. is the Pittsburgh-based North American arm of global materials maker Covestro A.G. of Leverkusen, Germany. The firm ranks as one of the world's largest producers of polycarbonate and other specialty plastics.

Arsenal—a New York-based private equity firm—now has made 21 plastics-related acquisitions since 2012. Most recently, in April 2016 Arsenal bought a majority stake in Peterson Chemical Technology L.L.C., a foam technology firm based in Fort Smith, Ark.

Accella is based in Maryland, Heights, Mo., and now consists of parts of 13 different companies that had been acquired by Arsenal. The firm operates production plants in the U.S., Europe and China, making custom formulated PU systems, tire fill, spray foam insulation, casting resins, surface and specialty coatings, and adhesives.