Snow Phipps buys chemical company from GSO

The mid-market firm’s debut $620m fund is now 60 percent invested following the purchase of ArrMaz Custom Chemicals, which has now had three alternative investment fund sponsors.

Snow Phipps Group, a New York-based mid-market firm, has purchased ArrMaz Custom Chemicals from GSO Capital Partners, the credit-focused hedge fund manager owned by The Blackstone Group.

Financial details were not disclosed, though SPG typically targets deals with total enterprise values between $75 million (€112 million) and $400 million. A source familiar with the transaction said the price tag was in the upper end of that range, and that the deal was 30 percent funded with a combination of cash equity or reinvestment from management.

ArrMaz custom-makes chemicals including those used to supply the fertiliser, asphalt and mining sectors, and is a “fabulous business in terms of its market position”, firm co-founder Ian Snow said.

“We see a very attractive industry backdrop here with increasing use of fertilisers,” he told PEO. Snow said the increased demand is fuelled in part by developing economies' rising consumption of proteins, the feed for which requires additional fertilisers.

Led by SPG partner Sean Epps, the secondary deal is the firm’s seventh investment since closure last year of its debut $620 million fund, now 60 percent invested.

Headquartered in Mulberry, Florida, ArrMaz was purchased along with management by GSO in July 2006 for an undisclosed amount from Windpoint Partners. A Chicago-based private equity firm, Windpoint acquired the chemicals company with management in 2003.

SPG and GSO have worked together on at least one other deal, with GSO acting as a financing source for SPG’s debut deal: the $109 million acquisition of FibreVisions, a producer of nonwoven fabrics and textile fibres.

SPG was founded in 2006 by Snow, a former Ripplewood rainmaker, and Ogden Phipps, of the Phipps family group, in association with Guggenheim Partners.