Industrial Chemicals, Products, Packaging, Distribution & Manufacturing

Applying deep domain expertise to produce exceptional growth

Specialty chemicals

Akoya is focusing on the specialty chemicals sector, comprising ~$150 Bn of annual sales in North America, for the following reasons:

  • Continued growth expectation in North America at GDP or above
  • Less capital intensive compared to basic or commodity chemicals
  • Attractive investment opportunities exist in companies with $15 MM to $1 Bn in sales
  • Many attractive sub-sectors exist where investors can enjoy oligopoly market dynamics
  • Many attractive businesses that have globalization
  • More stable, less cyclical earnings than other segments of the chemical industry
  • Businesses are not dependent on a single customer and usually has barriers to entry
  • The larger, multinational chemical companies have many ‘orphans’ in their collective portfolios

Target Segments for Specialty Chemicals, Materials and Polymers

  • Water Treatment
  • Agrichemicals
  • Coatings
  • Compounders
  • Flavor & Fragrance
  • Fabricated Insulation
  • Technical Fluids
  • Personal Care
  • Polymer Modifiers/Additives
  • Rubber Chemicals
  • Surfactants
  • Adhesives, Sealants & Tapes
  • Plastics

Industrial distribution & Manufacturing

Industrial Distribution represents a $750 billion market unto itself with 15 segments. Within that universe Akoya is most interested in the specialty chemicals, power transmission/motive control and metals distribution segments each representing markets of $223 billion, $54 billion and $120 billion respectively. In addition, Akoya is interested in Electrical, Industrial PVF and Safety Products distribution companies because:

  • Industrial Distribution in general and the three target segments of specialty chemical, power transmission/motion control and metals are relatively unconsolidated and expected to grow in the U.S. at greater than trend GDP rates. There are 83,000 individual companies with 113,000 branches.
  • Typical YoY organic growth rates for Industrial Distributors range from 6% to 14% which is typically at least twice the rate of growth of the underlying products being distributed.
  • Increasingly manufacturers of products are relying more heavily on distributors as producers seek the economy of scale large transactions provide while relying on distributors to customize the product offering to smaller customer needs while providing inventory management skill demanded by today’s lean working capital operating models.
  • Attractive investment opportunities exist for companies with sales of $25 million to $150 million and more. This segment makes up the vast majority of the operating companies in the Industrial Distribution market all of whom are privately held in this size segment.
  • Target companies have broad market risk spreading customer bases that are seeking high quality value add suppliers.
  • Ample opportunity to employ the Akoya buy, partner and build model to create and unlock value through organic expansion, management and marketing development, increase in value add activity as well as application of lean management principles.
  • The segments targeted are mission critical components to their customer’s success and the industrial distributor can count on a preferred position on their customers’ vendor list as long as they providing a superior value proposition.

Target Segments for Industrial Distribution

  • Metals
  • Specialty Chemicals
  • Power Transmissions & Motion Control
  • Safety Products
  • Gases & Welding Equipment
  • Electrical

Industrial Products & Packaging

Akoya is focusing on the industrial products sector as we believe middle market manufacturers of highly engineered products is an opportunity rich segment for value creation through investment in disciplined strategy development and execution. We seek companies that fall within one or more of the following categories.

  • Manufacturers in a strong niche position in a growth market
  • Manufactures of products that contain technology that will provide above average growth and product differentiation
  • Companies that have higher growth potential with increased investment in the:
    • Development of people and organizational capabilities
    • Execution of new strategic plans
    • Improved operation processes, systems & capacity
  • Companies run by owner/operators that wish to diversify holdings; remain with the business with partial ownership

Target Segments for Highly Engineered Manufactured Products

  • Packing Machinery & Processing Technologies
  • Promotional Packaging Manufacturers
  • Adhesive Application Systems
  • Test & Measurement
  • Specialty Fasteners
  • Advanced Dispensing Systems
  • Specialized Decorating Solutions
  • Packaging Equipment & Consumables
  • Food Equipment & Service
  • General Industrial Equipment

Companies in this sector