Quinpario raises $172.5 million for specialty acquisitions

22:25 PM | August 26, 2013 | Robert Westervelt

Quinn: Former management team of Solutia raises funds for specialty chemical acquisitions.

Quinpario Acquisition (St. Louis), a special purpose acquisition company (SPAC) created by former Solutia executives for specialty chemical buyouts, has completed a $172.5-million initial public offering.

"Quinpario Acquisition Corp. will leverage the experience of its executive leadership to target opportunities in the specialty chemicals and performance materials sectors, primarily focusing on acquiring companies with an enterprise value of up to $1 billion," says Jeff Quinn, chairman and CEO of Quinpario. Quinn is the former CEO of Solutia, and management includes four other senior Solutia executives. Quinpario sold 17.25 million units at $10/unit in the IPO, including the underwriters' exercise of a 2.25-million unit overallotment option.

Quinn says a SPAC gives the management team greater control of investment decisions and allowed management to work with investors who had previously backed the team at Solutia. “We created a vehicle for investors who have known and supported us before, and who we know are interested,” Quinn says. That investor base includes fundamental value investors, hedge funds that invested in bonds and equity as part of Solutia’s bankruptcy restructuring, as well as additional investors attracted to SPACs, he says. The SPAC also allowed for much quicker fund-raising than would have been possible had Quinpario decided to raise its own private equity fund and seek out investments from limited partners.

Quinpario says in its prospectus that it may “consider those sectors that complement our management team’s background, such as composites and carbon fibers, filtration and biomaterials, alternative energy and storage, specialty films and packaging, ceramics and inorganics, plastics and compounds, electronic chemicals and materials, specialty resins and plastics, chemicals and additives, and specialty fluids and lubricants.”

Quinpario now has up to 24 months to complete an initial acquisition, or it must return funds to investors. C&Co/PrinceRidge (New York) was the offering’s book-running manager. Cantor Fitzgerald (New York) and Drexel Hamilton (New York) acted as co-managers. Units are trading on Nasdaq, under the symbol QPACU.

Quinn was CEO of Solutia until its acquisition by Eastman last year. Quinpario Partners, the sponsor of Quinpario Acquisition, has made unsolicited takeover bids for Ferro and carbon fiber–maker Zoltek in the past 12 months and maintains significant stakes in those firms. Quinpario Partners also has a stake in Sunedison, the former MEMC Electronic Materials.