On the latest episode of Behind the Buyouts, American Securities LLC president and managing director Scott Wolff discussed the firm’s measured investment strategy, its specialty chemicals platforms and expectations for industrial M&A in 2025.
The approach of the firm with $23 billion in assets under management is influenced by its roots as a family office in the ’40s, said Wolff, who joined American Securities in 2002 after an investment banking stint at Merrill Lynch & Co.
“Those early family investors … still influenced our philosophy and the types of businesses we tend to look for — they tend to have some differentiating factor we can point to that we think will allow them to maintain their market position,” Wolff said. “It could be intellectual property, manufacturing, know-how and sometimes a long-term contract.”
The firm focuses on developing a strong relationship with target investments, sometimes over several years, and creating a value-creation plan ahead of time to be the winning bidder. It also has a 50-member resource group that supports portfolio companies with strategy, operations, procurement, human capital, data science, pricing and more.
American Securities typically invests in North American industrials, business-to-business and essential services companies with annual revenue between $150 million and $2 billion.
Meanwhile, Wolff, as well as the firm’s other industrials-focused managing directors, are keeping an eye on the sector’s rebound. Industrial businesses broadly have yet to recover volumes and earnings from 2022, prompting many sellers to wait on the sidelines and buyers to be more cautious around valuations.
“While there’s a lot of pent-up supply of businesses that will be sold, we haven’t quite seen a full recovery in those actually being actionable right now,” Wolff said.
Wolff, who focuses on specialty chemicals, is chairman of American Securities portfolio companies Hexion Inc., a Columbus, Ohio-based adhesives and performance materials maker; Meridian Adhesives Group, a Charlotte, N.C.-based high-value adhesives manufacturer; and Vibrantz Technologies Inc., a Houston-based specialty additives, pigments and colorants business.
Check out the podcast with Scott Wolff below:
More podcasts from The Deal are available on iTunes, Spotify and on TheDeal.com.
