Overview

In 2022, TotalEnergies decided to divest three niche specialty additives product lines, with associated manufacturing facilities in the US, Asia, and Europe. These product lines generated revenues around $250 million. However, the sale faced complexities due to discrete product lines with minimal overlap, multiple ERP systems, and the absence of a senior leadership team. COVID-19 disruptions added to the challenge, resulting in a failed initial sale process. A subsequent sale process collapsed during final diligence.

 

Scope of Work

Pacific Avenue Capital Partners aimed to acquire these product lines and create Resin Solutions Inc. After gaining exclusivity in December 2023, they engaged Vardis to build out a leadership team and provide advisory support to facilitate the acquisition and operational ramp-up.

Mandate

Identify & Introduce Potential Advisors

Vardis was tasked with sourcing advisors to provide insights on TotalEnergies' market position and to validate Pacific Avenue’s market sizing. Within three weeks, Vardis secured:

•   A former PE-experienced CEO who had previously led two of the three product lines during a previous stint at TotalEnergies/Cray Valley.
•   A specialty chemical CEO with expertise in aerospace and defenses.

 

Management Team Build-Out

During its initial Investment Committee review, Pacific Avenue had identified three critical executive needs to lead the business going forward: CEO, CFO, and Chief Commercial Officer (CCO). Each role required specific qualifications, including international and multi-channel experience, and familiarity with private equity and carve-out situations.

 

Vardis Outcomes

• CEO: Vardis recruited a leader with extensive international experience (living in Asia and the US), P&L authority over a $2 billion chemical business, and PE experience through a board role in an Apollo-backed company.
•   CFO: Secured an executive with a history of two successful PE exits in the specialty chemical space. He and the CEO both joined the company on a consulting basis prior to the close.
•   CCO: Identified a candidate with dual President and CCO experience in PE-backed specialty chemical company who started within five weeks of the close.

 

Resin Solutions Outcomes

•  Exited TSAs ahead of schedule
•  Shut down one of the commodity product lines and sold the associated production facility to retire acquisition debt
•  Refocused the business as a high-value, high-margin aerospace & defense chemical company

Overall, the investor estimates that its early engagement with Vardis will shorten its hold time by a minimum of 6 months.