AEA

 

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In 2007, AEA invested in Houghton International (“Houghton”), a leading global provider of specialty chemicals and technical services for metalworking applications. Founded in 1865, Houghton is headquartered in Valley Forge, Pennsylvania and operates 12 production facilities located in nine countries on five continents supported by more than 2,000 employees. The company’s broad range of specialty chemicals are used to lubricate, cleanse, harden, cool and protect metal components as they are being processed and treated.

AEA DIFFERENTIATOR: AEA INDUSTRY EXPERTISE
  • AEA’s extensive knowledge of various segments of the chemical industry, identified metal working sector as an area of interest years before Houghton was for sale.
  • AEA’s experience from a similar chemical segment, water treatment chemicals, provided targets for margin potential and business model attractiveness.
  • AEA Operating Partner had past experience in lubricants and water treatment.
AEA VALUE CREATION
  • Began to implement its strategic vision for Houghton by hiring from the AEA network, including a new CEO.
  • Under the leadership of AEA and the new CEO, Houghton successfully integrated two significant acquisitions and embarked on a broad reaching operational excellence program. AEA was critical in identifying, negotiating and executing both acquisitions, which were highly synergistic and created significant equity value.
  • Helped instill many of the safety, environmental, cash flow management, and reporting initiatives that have helped drive the company’s transformation.
  • AEA’s Asian operations were critical in all phases of the Houghton investment including initial diligence, acquisition evaluation and integration, divestiture of an unused Shanghai facility, and other strategic initiatives.
RESULTS
  • In December 2012, AEA sold Houghton to a strategic buyer.
  • Houghton successfully integrated two significant acquisitions and embarked on a broad reaching operational excellence program. These initiatives drove the realization of over $70 million in cost savings and helped the company successfully weather the global financial crisis of 2008-2009.
  • Under AEA ownership, Houghton nearly doubled its revenues, increased EBITDA by 2.5x, increased EBITDA margins by 500 bps, and nearly doubled Houghton’s market share in the metal working fluids industry, cementing Houghton as the clear market leader.