H.I.G. Snaps Up Petroferm


H.I.G. International has acquired Petroferm, including its Lambent Technologies division that manufactures and supplies oleochemical derivatives for lubrication formulations. Terms of the transaction, announced Oct. 29, were not disclosed.

Founded in 1981, Petroferm is a privately held specialty chemicals manufacturer and formulator. In the mid 1990s, Petroferm made a series of acquisitions: specialty silicones manufacturer Siltech, oleochemical derivatives maker Calgene Chemical, and natural waxes supplier Hansotech. Those three companies now constitute Petroferm subsidiary Lambent, based in Gurnee, Ill., in a large surfactant manufacturing plant acquired from BASF in 2003.

Lambents offerings include esters used as lubricity additives, food grade lubricant ingredients, vegetable oils used as base fluids, antifoams and multifunctional emulsifiers.

Paul Gaines, senior market manager for Lambent Technologies, said Petroferm overall has about 200 employees. The acquisition by H.I.G. allows us to have some capital for growth, so we can actually build some additional infrastructure here to handle growth in all markets, lubricants being one of them, Gaines told Lube Report. We fully expect were going to have capital expenditures to build some additional reactors and peripheral equipment. Lambents Gurnee location has 19 reactors.

Gaines said another benefit will be the relationship between Lambent and Uniqema Americas, the Chicago-based oleochemical business which Miami-based private equity firm H.I.G. Capital acquired from Croda International in May. Uniqema Americas supplies fatty acids and glycerine used in lubricant formulations as well as in personal care and other products. Were going to be run as separate companies, both under the same leadership, but we think theres going to be synergy between the two, Gaines added, noting the companies plants are about 50 miles apart in the Chicago area.

According to Gaines, the main challenge will be that the Uniqema Americas plant is non-kosher, in that its products are based on tallow. By contrast, Lambents Gurnee facility is a kosher certified production facility.

Were going to have to go through some changes and modifications to our plant in order to incorporate the products from Uniqema, Gaines added. Im sure well find some way to overcome that challenge. It may be a matter of doing additional reactors, of re-piping, of dedicating certain equipment to be non-kosher or kosher – we still have to go through that exercise.

He noted that the ability to handle non-kosher esters should benefit Lambent in the marketplace. The perception is that if youre buying kosher material, youre paying extra for it – sometimes you are, sometimes youre not, Gaines explained. But the perception is that you are. What well be able to do is offer non-kosher materials that may or may not be cheaper, but are more in line with what the customer is looking for.

Petroferm also has a products division that provides finished products used in the manufacturing industry to clean electronics and precision parts, and in the fuels and oil field industry to increase fuel combustion in oil-fired boilers.

In 1999, Petroferm acquired United Kingdom-based Banner Chemicals, divesting it in 2004 while retaining ownership of Banner subsidiary Joseph Storey and Co., a manufacturer of flame retardants and smoke suppressants. The Joseph Storey division, which is not part of the acquisition by H.I.G., will instead be spun off to Petroferm shareholders.

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