Elite advances with name change, continued investment

PITTSBURGH—DestinHaus Capital L.L.C., a private equity firm based in San Ramon, Calif., hinted at a name change for Elite Elastomers Inc. when it purchased the niche custom mixing firm in Ripley, Miss., in February.
That rebranding took place before both peers and customers at the ACS Rubber Division's International Elastomer Conference in Pittsburgh Oct. 5, as the specialty materials compounder announced the new moniker will be Elite Advanced Polymers.
The 50-person company hopes the new name is the "perfect mix" of terms to show off the firm's interest in high-end compounding.
"The company has done very well in the oil and gas area from a marketing standpoint," Andy Claytor, vice president of sales with Elite Advanced Polymers, told Rubber News during the IEC at the David L. Lawrence Convention Center. "But now we are really looking to get into niche opportunities—consumer, industrial and medical, among others—where customers are looking for something very different, something in the high-end market."

Along with the name change, he said Elite Advanced Polymers is investing in upgrading its research and development, manufacturing technology and personnel to enhance its operations, "going beyond elastomers to broaden its portfolio to include other polymers and products, and expand into other industries"—and investing in Middle America.
"We are very excited about the future possibilities for Elite Advanced Polymers," said Murli Nathan, the firm's chairman and CEO. "Our plan is to execute ... American ingenuity, best-in-class Japanese innovation, technology and quality systems to revive job growth and the economy in middle America. We have a long-term outlook and plan to add more acquisitions to create a comprehensive set of products and services to better serve our customers.
"We are committed to growing the business and customer base, but more importantly, we are investing in our people, creating a model work culture and committed to being a good citizen in the community."
Elite tries to maintain forward-looking philosophies with its customers, especially with those who use HNBR and fluoroelastomers—considered the high-end compounds that often are associated with unique, lower volume uses.
"Where do they want to be three to five years from now? That's where we want to be from a development standpoint for our customers," Claytor said, adding that the company has not yet entered the silicone and engineered plastics spaces, but "they are something that we are looking at."
"DestinHaus has the (capital) means behind the group in evaluating life sciences—especially from an education standpoint. How do we take this technology and convert it into something more commercial and sell it to people who are on the cutting edge of their industry—that is really what we are trying to do now," he said.

While Elite continues to focus on advanced materials, it has comprehensive capabilities that keep its options flexible.

"We also run EPDM, as we have a customer-centric approach," Ahdiv Nathan, a partner at DestinHaus Capital, told Rubber News in March. "We can be flexible on which polymer types we use. Our idea was that we wanted to build an overall advanced materials portfolio, but we have an agnostic approach with respect to polymer types, and Elite provided that really strong foundation for us across various polymers.

"We don't shy away from anything in particular."

Ahdiv Nathan said bringing Japanese investment to the American Heartland is an exciting proposition.

"Our investor base is Japanese, but our goal with Elite is to invest in this country and grow manufacturing in this area," he said. "The acquisition allows us to make decisions not just for the near term but for the longer term."

Hema Nathan, managing partner with DestinHaus, said Seiichiro Araki has brought expertise in the custom mixing space to Elite. Araki serves as executive vice president of Elite and on the Board of Directors with DestinHaus.

"He has extensive experience in operational excellence, and this different way of working is being brought to our factory operations ... so that we can rise to the level of being the most trusted partner for the rubber industry," she said.

Murli Nathan noted that the central U.S. "is a good part of the country to facilitate manufacturing," and that the Ripley campus has the land and infrastructure to add capacity, including a second color line.

"Elite has several customers in close proximity," he said. "We have customers in different parts of America and globally, but a significant portion of them are in this range.

"Our goal is to invest in Ripley and the area, whether that is through hiring or improving wages and benefits for the workers. In terms of assets, we intend to increase specialty compound capacity there. We have the infrastructure to do this."

Begun by Steve Glidewell in the early 2000s—his wife, Ginger, joined the firm later on—Elite made a name for itself over two decades in the oil and gas, automotive, industrial conveyor belting and consumer-oriented product industries. Elite has a portfolio of swellable elastomers that are used in the completion of fracking wells, supplying both water and oil swell packers.
Steve Glidewell remains a consultant for the portion of Elite now under DestinHaus ownership, through February.
Elite Advanced Polymers has a main, combined custom mixing and warehousing facility in Ripley, which comprises three mixing lines (including a color line). The campus also has a research and development facility (part of the DestinHaus transaction) and two buildings that comprise Elite Elastomer Products L.L.C., a finished goods business established in 2016 that remains under Steve Glidewell's ownership.
While oil and gas remains a major portion of Elite Advanced Polymers' custom mixing applications, Elite has seen an area of increased growth in the life sciences market. And life sciences remains an area that DestinHaus would like to grow further—either through expanded capacity with Elite or via future business acquisitions.

"We are hoping to close a deal by the end of the year," Hema Nathan said at the IEC.

DestinHaus Capital, established in 2018, has its roots in a management consulting firm founded by the Nathans 14 years ago, also in California. The original firm strategized with Japanese businesses to accelerate their growth, and as such developed close relationships with those businesses over the years.
The alliances paid off for DestinHaus with the purchase of Elite Elastomers in February. Terms of the transaction were not disclosed.

Like so many others at the International Elastomer Conference, Elite Advanced Elastomers is seeing the same market tightness as everyone else who bases their success on raw material pricing and efficient supply chain management.

And though both are volatile right now, the Nathans say Elite remains in a good position.

"Obviously, with DestinHaus we bring those relationships where we source raw materials and receive logistical help," Claytor said. "And I have 30 years of experience in the rubber industry, so I have relationships with people as well from this end.

"We are always looking to see if there is a better way of doing things, and we want to continue those important relationships with our suppliers. How do we translate those materials into products for our customers through this unprecedented time?"