Our Strategy

“We mesh well with the TorQuest team because we have the same core values.”
Pat Grozier,
Pinova

Corporate Carve-Outs

While we have executed on a full range of transaction situations, corporate carve-outs are an investment specialty of TorQuest Partners. Parent companies from whom we have purchased divisions include 3M, Ashland, LyondellBasell, United Technologies, Gerling Group, General Electric, ICI and Rhone Poulenc.

Successful corporate carve-outs require a new vision for a business that is no longer aligned with the strategy of its parent company, a transaction structure that addresses the unique needs of a corporate vendor, and successful execution of a transition plan that quickly enables the acquired business to be a successful independent company.

In these corporate carve-out situations, TorQuest works closely with corporate sellers to understand their objectives and to tailor an appropriate acquisition solution. In executing these transactions, we take steps to address the needs and concerns of all stakeholders, including protecting the parent company’s brand, preserving and enhancing customer and supplier relationships, safeguarding the interests of employees, and ensuring that the new business continues to be a responsible member of the community in which it operates. We expend considerable resources and effort on detailed transition planning to ensure a smooth transition to our ownership. Post-closing, we invest in the newly independent company to build a strong foundation for growth.

The result is a new, standalone company that is prepared for success, and a parent company that has achieved its divestiture objectives in a seamless transition.

Case study: Pinova Holdings

Carve-out of Pinova

Pinova Coloured Logo

In January 2010, TorQuest completed the acquisition of Pinova, a division of Ashland, Inc. Headquartered in Brunswick, Georgia, Pinova is a world leader in high performance specialty rosins and resins derived from natural sources, including pine trees and citrus peels. Pinova operates in the specialty chemicals sector, where TorQuest’s principals have substantial prior experience and strong relationships.

The Pinova investment process began nearly a year prior to the closing of the transaction in January 2010. When Pinova was put up for sale by its parent Ashland Inc. in early 2009, thanks to our experience and contacts in the specialty chemical sector, we identified Pinova as a highly attractive transaction opportunity and a business that could thrive and grow as an independent business under TorQuest’s ownership.

After entering into discussions with Ashland in early 2009, TorQuest created a comprehensive transition plan that included creating a new management structure, working with management to hire additional personnel that would allow the business to operate independently, implementing new compensation programs and employee benefits, and building out new back office capabilities. These steps were taken with the aim of ensuring that the business would continue to support and delight its global customers without the support of its corporate parent. This extensive planning process ensured a successful transition with minimal disruption for both Pinova and Ashland following completion of the transaction.

TorQuest also focused on aligning our interests with those of management by ensuring that they had a meaningful stake in the success of the company, to an extent not possible when Pinova was part of a much larger organization. Following our initial investment, TorQuest also launched a program of significant investment in Pinova’s people and its operations to ensure that the new company was well positioned for continued innovation and leadership in its markets. Since closing, Pinova has demonstrated outstanding performance, and the transaction has proved positive for all key stakeholders.

Combination with Renessenz

Renessenz

TorQuest’s investment thesis included using Pinova as a platform for growth through the acquisition of complementary natural specialty chemical businesses. Prior to acquiring Pinova, we had identified the Flavors and Fragrances division of LyondellBasell as an attractive natural specialty chemical business with an exceptional management team that would be highly complementary to the Pinova business. Pinova Holdings, the parent of Pinova, ultimately acquired the Flavors and Fragrances division, now called Renessenz, in December 2010.

The acquisition of Renessenz by Pinova Holdings involved a second carve-out with many similarities to the Pinova carve-out process, and the team was able to quickly develop and execute a transition plan for Renessenz in a short period of time. Since the initial investment, the Renessenz management team, with support from TorQuest and Pinova Holdings, have worked to ensure a smooth transition of the Renessenz business from LyondellBasell’s ownership. The transition has proven seamless and Renessenz is thriving as a sister company to the Pinova business under Pinova Holdings’ ownership.

The investment in Renessenz has been transformative for the Pinova Holdings platform, more than doubling the scale of the business and broadening its product and end market reach. The resulting Pinova Holdings business — the result of two complex corporate carve-outs — is now a clear global leader in the natural specialty chemical sector.

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