Applied Research, Inc.
Producer and marketer of niche specialty chemicals sold internationally to paper and packaging manufacturers and for certain other technology applications. Company developed proprietary process and manufacturing technology that materially reduced the cost of production of colloidal silicate and related application equipment.
In May 1994, a Principal led a group of investors in a common stock investment of $250,000 in the Company to allow management to accelerate growth by increasing manufacturing capacity and broadening distribution.
From the time of purchase to sale in 1998 revenue grew from $800,000 to a run rate of approximately $10 million. During this period of significant growth the Company increased EBITDA from break even in 1994 to $2.6 million in 1998. In fall of 1997, a large NYSE chemical company approached the Company and initiated the sale process with a valuation significantly higher than market comparables. Although this acquirer ultimately did not purchase the Company, it initiated an internal process leading to the decision to sell the business. The Company was eventually sold to Vinings Industries for $13.2 million in cash and earn out valued at approximately $440,000. Realized annual IRR 93.5%.