SK Capital Partners, one of the few private equity firms focused on the specialty chemicals industry, is seeking $2.75 billion for a sixth flagship buyout offering.
The target for SK Capital Partners VI was published in a report for Arkansas Teacher Retirement System. The hard-cap will likely be $3.5 billion, which if met would make the vehicle 67 percent larger than its predecessor, closed in 2019 at $2.1 billion.
Fund VI in December raised an initial $480 million, the ATRS report said, and was expected to hold further closings in Q1 2022. UBS is the placement agent.
SK Capital was launched in 2007 by managing directors Barry Siadat and Jamshid Keynejad. Both are long-time sector investors, Siadat in part as a co-founder of Arsenal Capital Partners and Keynejad in part as a private investor and former executive with Signet Diagnostic Imaging.
The pair set up SK Capital to invest exclusively in specialty chemicals and materials – components of metals, alloys, plastics, fibers, ceramics and other composites key to the production and functionality of everyday products – as well as pharmaceuticals.
The firm makes control investments in global mid-market and large businesses in these spaces, especially those deemed to have unrealized or unrecognized potential, the ATRS report said. Of particular interest are companies with technologically advanced goods and services that are difficult to replicate.
Businesses are acquired through buyouts, carve-outs, recaps and other deals. Post-investment, SK Capital works with management teams to expand margins through operational improvements and to pursue growth through acquisitions and other initiatives. Other details of the strategy were not disclosed.
Buying and selling
The portfolio today holds 20 active investments, according to the firm’s website. Recent additions include Heubach, a color solutions provider that in January partnered with SK Capital to acquire Clariant’s pigments subsidiary for about $950 million.
SK Capital did several other platform deals last year, among them the acquisition of Seqens, a pharmaceutical solutions and specialty ingredients company. It also bought Canlak and Valentus Specialty Chemicals and merged them to create a new wood coatings business.
Exits in 2021 included Perimeter Solutions, a fire-fighting chemicals maker sold to listed acquisition vehicle EverArc Holdings for $2 billion. SK Capital was also reportedly weighing an IPO for Ascend Performance Materials that could value the nylon resin producer at about $5 billion.
SK Capital Partners V was showing solid performance as of last June, the ATRS report said, with a 41.6 percent gross IRR. Fund IV was earning a 27 percent gross IRR, while Fund III was earning a 32.5 percent gross IRR.
The firm in 2019 closed an inaugural fund geared to lower-mid-market opportunities, securing $400 million.
Siadat and Keynejad oversee a team of some 20 investment professionals based in offices in New York and Boca Raton, Florida. Sharing leadership are managing directors Jack Norris, Aaron Davenport and Mario Toukan.
SK Capital did not respond to a request for comment on this story.
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