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H.I.G. portfolio company buys gypsum producer

ACG Materials’ purchase of Diamond Gypsum marks the seventh acquisition since the company entered H.I.G.’s portfolio in 2012.

ACG Materials, an Oklahoma-based portfolio company of H.I.G. Capital, has acquired Diamond Gypsum Company for an undisclosed sum.

Diamond Gypsum mines gypsum, a soluble source of plant nutrients, calcium and sulfur that also has applications in energy and infrastructure and as a pet food supplement. Located in Watonga, Oklahoma, the company owns and operates a quarry in the central part of that state.

ACG is an industrial minerals producer and processor that entered H.I.G.’s portfolio in 2012, through a recapitalization of what was then called Harrison Gypsum.

H.I.G. principal Ryan Kaplan told Agri Investor that the Diamond Gypsum acquisition is part of the firm’s ongoing efforts to transform the company from a family-owned regional miner focused on energy to a diversified miner with national scope. As part of that effort, Kaplan said, H.I.G. has taken steps to position ACG to benefit from a significant increase in agricultural use of gypsum.

“Over the last several years, as farmers have become educated in terms of the benefits of using agricultural gypsum on their crops, that product has increased in usage,” Kaplan said, highlighting gypsum’s ability to increase crop yield and quality by helping retain water. “One of our key investment theses has been to find businesses that are market-leaders in these products, so that we can sell more of our product into agricultural land markets.”

ACG’s agricultural customers are farmers and farm suppliers largely concentrated in the Central Valley of California and Florida’s panhandle, according to Kaplan. Diamond is the seventh acquisition that ACG has completed under H.I.G.’s ownership and Kaplan said that it would position the company to expand service to customers located in the Midwest.

H.I.G. is a Miami-based private equity firm with approximately $22 billion of equity capital under management. The firm utilizes both debt and equity in its investments and also maintains offices throughout the US as well as London, Hamburg, Madrid, Milan, Paris, Bogota, Rio de Janeiro and Mexico City.

Food related investments in its current portfolio include sausage manufacturer Southern Quality Meats, Brazilian ice cream producer Crème Mel and chilled foods provider Adelie Foods. In March, H.I.G. sold Canadian ice cube manufacturer Arctic Glacier to Carlyle for $723 million.