ColorMatrix Corp., the leading supplier of liquid color to the plastics industry, might be on the selling block.
According to a July 15 report from Reuters news service, Audax Group — the Boston financial firm that owns a majority stake in ColorMatrix — is seeking a buyer for the Berea firm. ColorMatrix might command a purchase price of more than $400 million, according to the report.
Officials with both ColorMatrix and Audax could not be reached for comment last week. Market sources said ColorMatrix has annual sales of about $225 million. The Reuters report said the firm has earnings before interest, debt, taxes and amortization of between $45 million and $50 million.
In addition to liquid color, ColorMatrix also makes color concentrates and oxygen-scavenger additives that primarily are used in PET bottles to preserve shelf life. Although the firm continues to lead the liquid color market, these other products now account for more than half of ColorMatrix's sales, market sources said.
ColorMatrix was founded in Cleveland in 1978 by John Howe and Mike Shaughnessy, who retain minority stakes in the business. Audax acquired the majority stake for $175 million in 2006.
In addition to Berea, Dallas, Mexico City and São Paulo, ColorMatrix operates plants in Suzhou, China; Eindhoven, Netherlands; and Liverpool, England. The firm expanded capacity in Suzhou last year.
Earlier this year, ColorMatrix bought Gayson Silicone Dispersions Inc., a Barberton, Ohio-based maker of colorants and additives for silicone rubber. That move marked ColorMatrix's third acquisition since 2007.