AE Industrial Partners Completes Sale of American Pacific Corp. to NewMarket Corp. for $700 million

Rhea-AI Summary

AE Industrial Partners, LP has completed the sale of American Pacific Corporation to NewMarket Corporation for $700 million in cash. American Pacific is a leading specialty materials manufacturer of critical chemicals for U.S. Government's military and space programs, with a focus on missile defense, space launch, pharmaceutical, and fire suppression applications. The company also produces Halotron BrX, an environmentally friendly fire extinguishing agent. AEI has been a supportive investment partner, helping American Pacific strengthen its leadership position and support of customers.

Insights

Financial Analyst

The sale of American Pacific Corporation to NewMarket Corporation for $700 million represents a significant transaction within the specialty chemicals and materials sector. From a financial perspective, this acquisition is substantial due to the size of the transaction and its potential to create shareholder value for NewMarket Corporation. The deal is expected to enhance NewMarket's product portfolio, particularly in the niche area of chemicals for military and space applications, which may lead to revenue diversification and potentially higher margins given the specialized nature of the products.

It is also worth noting that the acquisition was made entirely in cash, which suggests that NewMarket Corporation is confident in the financial stability and future cash flows of American Pacific. This could be a positive signal to investors about the perceived value and strategic fit of the acquisition. Furthermore, investors should consider the impact on NewMarket's liquidity and debt levels, as large cash transactions can affect a company's balance sheet.

Market Research Analyst

The specialty chemicals industry, particularly for defense and space applications, is a niche but growing market. The acquisition of a company like American Pacific, which has long-standing qualifications and relationships with NASA and the Department of Defense, provides NewMarket Corporation with a competitive edge in this sector. The strategic acquisition could enable NewMarket to capitalize on increasing defense spending and the current emphasis on space exploration.

In addition, American Pacific's environmentally friendly fire extinguishing agent, Halotron BrX, aligns with increasing regulatory and consumer demand for sustainable and eco-friendly products. This could open new market opportunities and enhance NewMarket's reputation as a responsible and forward-thinking company. However, the integration of such specialized operations will require careful management to realize synergies and maintain the high standards required by American Pacific's government customers.

Defense Industry Analyst

The relevance of American Pacific's capabilities in missile defense and space launch applications cannot be understated in the current geopolitical climate. With heightened global military tensions and a renewed focus on space as a strategic domain, companies that provide critical components for these sectors are likely to see sustained demand. American Pacific's 60-year history of serving defense and space organizations speaks to its entrenched position in the market and the technical expertise required for such specialized production.

For stakeholders, the long-term implications of this deal include potential increased demand for American Pacific's products as the U.S. continues to invest in national security and space exploration. However, the company must navigate the complexities of defense contracting and maintain its technological edge in a field where innovation and reliability are paramount. The successful execution of this strategy could lead to significant benefits for NewMarket Corporation in terms of reputation, revenue and strategic positioning within the defense and aerospace sectors.

BOCA RATON, Fla.--(BUSINESS WIRE)-- AE Industrial Partners, LP (“AEI”), a private equity firm specializing in Aerospace, National Security, and Industrial Services, today announced that affiliates of AEI have completed the sale of American Pacific Corporation (“American Pacific” or the “Company”), a leading specialty materials manufacturer of critical chemicals for some of the U.S. Government’s most vital military and space programs, to NewMarket Corporation (NYSE: NEU) for $700 million in cash.

Founded in 1955, American Pacific produces highly specialized chemicals through proprietary processes for use in missile defense, space launch, pharmaceutical, and fire suppression applications. The Company, based in Cedar City, Utah, produces performance additives utilized in solid rocket motors for use in space launch and military defense. American Pacific is qualified to work on several NASA and Department of Defense programs, serving these organizations for over 60 years. American Pacific also manufactures Halotron BrX, a clean and environmentally friendly fire extinguishing agent that replaces existing legacy high ozone-depleting fire extinguishing solutions.

“Since investing in American Pacific in 2020, we have worked with the management team to support their growth strategy and their mission to deliver critical solutions that empower U.S. national security and space exploration,” said Kirk Konert, Managing Partner at AEI. “It has been gratifying to help the Company strengthen its leadership position and support of customers while delivering a positive outcome for our investors. We wish the American Pacific team continued success as they move forward to their next stage.”

“AEI has been a first-rate investment partner to our business over the past three years, providing pivotal guidance, industry knowledge and resources that have helped us continue our growth trajectory and evolve our offerings,” said Hal Murdock, CEO of American Pacific. “As we open our next chapter, we are excited about what we have been able to achieve together.”

Guggenheim Securities, LLC and 3Wire Partners served as financial advisors, and Kirkland & Ellis LLP served as legal advisor to AEI on the transaction.

About AE Industrial Partners

AE Industrial Partners is a private investment firm with $5.4 billion of assets under management focused on highly specialized markets including Aerospace, National Security, and Industrial Services. AE Industrial Partners has completed more than 130 investments in market-leading companies that benefit from its deep industry knowledge, operating experience, and network of relationships across the sectors where the firm invests. With a commitment to driving value creation in partnership with the management teams of its portfolio companies, AE Industrial Partners primarily invests across private equity, venture capital (AEI HorizonX), and aerospace leasing. For more information, please visit www.aeroequity.com.

About American Pacific Corporation

Founded in 1955, American Pacific Corporation is a leading specialty materials manufacturer of critical chemicals for some of the U.S. Government’s most vital military and space programs, and clean fire extinguishing agents for the fire protection industry. America Pacific produces highly technical materials through proprietary processes for use in missile defense, space launch, and fire suppression applications. We have built a world-class reputation for reliability and quality in markets where failure is not an option. The Company operates out of a state-of-the-art manufacturing facility based in Cedar City, Utah.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240116935581/en/

Media

Matthew Conroy

Stanton

(646) 502-3563

mconroy@stantonprm.com

Source: AE Industrial Partners, LP

FAQ

What is the ticker symbol for NewMarket Corporation?

The ticker symbol for NewMarket Corporation is NEU.

What is the specialty of American Pacific Corporation?

American Pacific Corporation is a leading specialty materials manufacturer of critical chemicals for U.S. Government's military and space programs, with a focus on missile defense, space launch, pharmaceutical, and fire suppression applications.

What is the sale price of American Pacific Corporation?

American Pacific Corporation was sold for $700 million in cash.

What is Halotron BrX?

Halotron BrX is a clean and environmentally friendly fire extinguishing agent that replaces existing legacy high ozone-depleting fire extinguishing solutions.

Who is the CEO of American Pacific?

The CEO of American Pacific is Hal Murdock.