Satori Capital is pleased to announce that California Products Corporation (“CPC”) completed a strategic business combination with Nicoat during the fourth quarter of 2015. The divestiture generated cash-on-cash returns for investors that exceed typical private equity results, and it created an outstanding internal rate of return (IRR).

Consistent with our strategy based on conscious capitalism, our investment resulted in a successful outcome for all stakeholders including:

  • Customers: Customers of the companies that CPC acquired during our investment period will continue to have access to the brands with which they have long been familiar, thereby ensuring the longevity of the legacies that were important to the divesting owners.  In addition, CPC’s chief operating officer will continue to serve in a similar role in the combined business to ensure customers receive CPC products with at least the same quality as those that they have received during the last 90 years.
  • Suppliers: CPC’s primary suppliers are multinational providers of chemicals and related materials.  CPC’s relatively small size limited its ability to impact the behavior of suppliers during our investment period.  However, as CPC’s scale increases through its combination with Nicoat, it will continue to seek opportunities to develop long-term relationships with suppliers that will benefit both parties and other stakeholders.
  • Employees: The CPC leadership team plans to continue reminding team members that they are empowered members of the company.  The leadership team also hired key members from companies it acquired, thereby ensuring for continuing team members that their culture is well-represented by the company’s ongoing leadership.
  • Community and Environment: CPC’s products are environmentally friendly water-based acrylic paint coatings and products that assist with environmental remediation and containment.  We anticipate that the combination with Nicoat will provide additional potential distribution channels that may allow the broader use of environmentally friendly products.
  • Investors: By sourcing the investment opportunity on a proprietary basis and emphasizing value creation for all stakeholders, CPC’s leadership team generated financial returns for Satori’s investors that we believe not only exceed typical private equity returns but that also achieved the impact of capital those investors seek.

CPC is a rapidly growing, industry-leading, sustainably run company that provides products and services to customers that enhance the community and environment. Its leadership team and board operated the company with a long-term perspective, a commitment to enhancing relationships with all of their stakeholders, and a significant personal financial stake in the business. Those are some of the qualities that we expect to find in a Satori portfolio company.

We thank you for your ongoing support and encouragement, and we look forward to working on other compelling investment opportunities with attributes similar to those of CPC. If you know a business that would benefit from our approach, please contact one of us.