While the fourth quarter is so far not proving encouraging for sellers, one company that could hit the block in early 2023 depending on market conditions is Arsenal Capital Partners LP color masterbatch platform Chroma Color Corp., The Deal has learned.

While Arsenal has not hired an adviser to sell the business or formally set a timeline for an auction, three industry sources said it is one of a few businesses Arsenal will likely explore selling in 2023 based on the timeline of its investment and the fact that the firm has largely accomplished its growth initiatives for the business.

McHenry, Ill.-based Chroma Color is projected to generate around $45 million of Ebitda in 2022, two of the industry sources said. The platform’s Ebitda margins are near 20%, estimated one of the sources.

Chroma Color makes color concentrates, or masterbatches, by mixing pigments and dyes with dispersions and other additives and sells these products to various plastic makers in markets ranging from electronics to medical devices and appliances.

Arsenal has bolted on eight businesses to Chroma Color since combining Carolina Color Corp. and Breen Color Concentrates Inc. to form the platform in 2017.

In the broader market for colorants, there has been some renewed activity recently after several deals were delayed by the pandemic in 2020.

Upstream from Chroma Color’s masterbatches, German pharmaceutical, chemical and life sciences company Merck KGaA and Swiss chemical company Clariant AG each put their pigments businesses up for sale in early 2020, only to have to shelve those processes due to the fallout from the coronavirus.

Editor’s note: The original, full version of this article was published Dec. 5, 2022, on The Deal’s premium subscription website. For access, log in to TheDeal.com or use the form below to request a free trial.