BUSINESS OVERVIEW
Spartech is a leading custom manufacturer of specialized acrylics and other engineered extruded plastics used in a variety of applications and end markets including healthcare, aerospace & defense, industrial, automotive, consumer goods, and packaging. Through its network of 14 manufacturing plants and a unique innovation center, Spartech provides acrylic products, plastic sheet and rollstock, specialty film laminates, and packaging solutions to over 1,000 customers in North America, many of whom have partnered with Spartech for decades. Spartech has a long history of providing customers with innovative material science formulations and engineered solutions. The company’s breadth of highly technical manufacturing capabilities is unique in the industry, utilizing multiple plastic resin types and manufacturing processes including acrylic cell casting, stretching, multilayer extrusion, blown film, and thermoforming.
THE SITUATION
Prior to Nautic’s investment, Spartech was a division of a publicly traded specialty materials business that was carved out to a private equity sponsor in 2017. While the management team (though the CEO was remaining with the prior sponsor after Nautic’s 2019 acquisition) and the company’s engineered solutions were strong and strides had been made to improve the operations of the company, margins remained suboptimal and revenue was not growing.
WHAT WE DID
Nautic, with Operating Advisor John Manzi as Executive Chairman, supported Spartech’s management team on a number of initiatives that ultimately led to exit multiple expansion over an 18 month hold period. The salesforce was realigned with team leaders hired by end market, returning the company to positive organic revenue growth, an accretive add-on acquisition was completed to prove out the platform as a consolidator (with Nautic building a deep and actionable further M&A pipeline), and through operational initiatives and operating leverage EBITDA margins nearly doubled.
