California Products / Dry-Treat

Headquartered in Andover, Massachusetts, California Products Corporation (“CPC”) is a leading manufacturer of architectural and specialty coatings. CPC operates in three divisions: California Paints, California Sports Surfaces, and Fiberlock Technologies. The Paints division manufactures premium exterior and interior paints along with exterior wood stains. Sports Surfaces is the world’s largest producer of acrylic athletic surfacing materials, primarily for tennis and running tracks. Fiberlock Technologies offers the broadest and most comprehensive product lines for mold remediation as well as lead and asbestos encapsulation. CPC engaged Grace Matthews to help grow the business through acquisitions with a focus on profitable businesses with defensible technologies. Dry-Treat fit this description with a line of penetrating sealants designed for brick, stone, and concrete surfaces. Due to Grace Matthews experience in chemicals and coatings, an advisor to Dry-Treat reached out to Grace Matthews regarding the sale of the business. The advisor determined that we would likely have the necessary contacts to generate interest with potential strategic buyers. After recognizing the strategic fit between CPC and Dry-Treat, we advised our client to consider acquiring Dry-Treat. After CPC’s management team showed initial interest, Grace Matthews worked closely with the team to identify and quantify potential synergies between the businesses. While the product lines were highly-complementary, the operational synergies from CPC’s existing facilities in Brisbane, Australia enhanced the natural fit between the businesses. Due to the Dry-Treat’s entities spread across Australia, the US, and the UK, CPC used multiple purchase agreements to acquire Dry-Treat’s attractive portfolio of intellectual property. After receiving interest from several parties, Dry-Treat chose to partner with CPC based on the growth opportunities that CPC could provide. CPC’s existing dealer network supplies Dry-Treat with a more robust distribution pipeline, while the common footprint in Australia granted CPC additional strategic options for the region. CPC could also be able to leverage Dry-Treat’s dealer network outside the U.S. As interior and exterior sealants, the Dry-Treat products are well-suited to supplement CPC’s existing line of stains, coatings, and surface treatments. Both parties were pleased with the outcome of the transaction, given the synergies and technological capabilities that should support future growth.