Even after buying four companies in two years, officials at Maroon Group LLC have the green light to make more acquisitions.
“We want to continue to grow our position in North America,” President and CEO Mark Reichard said in a recent interview at Maroon's headquarters in Avon, Ohio. “There are a lot of opportunities out there.”
Maroon's product list includes additives and pigments for plastics and many other markets. The firm has been on a buying spree since New York-based private equity firm CI Capital LLC bought a majority stake in Maroon in June 2014.
“There was a lot of consolidation going on in specialty chemicals, and we saw the writing on the wall,” Reichard recalled. “So Mark Maroon and I decided to control our own destiny and work with CI Capital to continue to grow the business.”
Mark Maroon is the firm's chief technology officer and the son of Anthony Maroon, who founded the firm in 1977 as a supplier of specialty chemicals to paint manufacturers in Northeast Ohio. Reichard — who joined Maroon in 1982 — became president and CEO in 2004 after Anthony Maroon's death.
Maroon's first acquisition was of Addipel LLC, a custom blender of plastic resins, compounds and concentrates in neighboring Avon Lake in October 2014. Next on the list was D.B. Becker Co. Inc., a specialty chemicals distributor based in Clinton, N.J., in July 2015. Becker supplies raw materials for plastics, paints, coatings and other markets.
In January, specialty chemicals distributor CNX Distribution of Hurst, Texas, joined the Maroon stable. Materials distributed by CNX include additives and pigments used in plastic applications, as well as polyurethane and polyol resins.
Most recently, Maroon in May purchased specialty chemicals distributor U.S. Chemicals LLC of Darien, Conn. That firm sells and distributes several plastic feedstocks — including styrene monomer — as well as epoxy resins.
No purchase prices were disclosed in any of the four acquisitions. Reichard said Maroon's deals for Becker, CNX and U.S. Chemicals have allowed the firm to grow geographically beyond its traditional base in the Midwest U.S. He added that Maroon really hadn't competed with any of those three firms.
The additions have lifted Maroon's annual sales total to around $200 million, with about 20 percent of that going directly into plastics applications. “We sell additives and pigments to all the major thermoplastic compounders,” Reichard said.
Maroon's distribution volume also has grown to more than 35 million pounds. The firm operates a 120,000 square-foot warehouse and uses a network of 30 public warehouses in the U.S. and Canada.
Other deals are on the horizon for Maroon. “There's still a lot of fragmentation in specialty chemicals,” COO Mike McKenna said. “There are a lot of privately held second and third-generation businesses.”
Financial markets were tight earlier in the year, but now have opened up, according to Pat Massey, Maroon's vice president of corporate development. “There's a lot of interest in the distribution space from strategic and financial buyers,” he said. “We know it's almost always going to be a competitive situation with more than one bidder when we look at a company.”
Many of Maroon's customers are growing in anticipation of new resin capacity coming online in North America or because of organic growth in automotive and other markets. “A lot of our customers are debottlenecking or adding new lines or building new facilities,” Reichard said.
In addition to Maroon, CI Capital's other plastic-related holdings include packaging maker IntraPac Group of Mississauga, Ontario; blow molder KIK Custom Products of Concord, Ontario; and vinyl siding extruder Ply Gem Holdings Inc. of Cary, N.C.