Coatings World - September 2014

Quest specialty chemicals’ stock is soaring

Acquisitions top strategic growth plan for privately held company

the automotive refinishing market. It is a one-stop shop for value-priced refinishing and paint systems that perform like premium-priced brands. While Quest Automotive may not be a household name, its Matrix, Pro-Spray and U.S. Chemical brands would be recognized by almost anyone in the automotive color and refinishing markets. Quest Construction Products is a market leader in commercial liquid reflective roofing and pavement coatings. It is the only national manufacturer of roofing and coating systems for the entire building envelope. Industrial Products provides custom color matching liquids and aerosols and other specialty coatings for industrial, automotive, marine and consumer markets.

your company’s growth has been remarkable, with sales
increasing ten fold in less than a decade. how have you
achieved that?

We have a buy-and-build strategy. There are about 10 big companies in the coatings industry that control 80 percent of the market and about a thousand other companies fighting for the other 20 percent. We want to acquire the best of those small-to medium-sized coatings companies. We want companies that have a growth culture, strong brands that complement our portfolio of products and a strong management team. Culture, brands and entrepreneurial management are the keys in our vetting process. Then we work hard at efficiently managing those brands, increasing market penetration, developing new products and making operational improvements. Our corporate headquarters team provides financial management, information technology, human resources and marketing support to our divisions. However, we allow our divisions and our brands to operate independently.

When you approach an acquisition target, what impresses
them most about Quest? What worries them most?

They are most impressed with our diversified product portfolio, leading market positions and growth curve. They also like that we are an international company. As for what worries them, it is clear in the first question they always ask: “Who is Quest?” While they may know our brands, they don’t know Quest because we have always been so brand-focused. I think we’ve reached the point in our growth curve where we need to start building the Quest brand, too.

as a final question, can you give readers who may be business
owners your elevator speech to sell them on Quest?

Quest is one of the largest privately owned specialty coatings companies in the world. We make products that protect, preserve and repair our customers’ assets. Our markets are large, global and fragmented. They allow us to financially outpace, as a percentage of growth, the world’s largest coatings manufacturers, and they offer unending organic growth opportunities. Coupled with our buy-and-build strategy, Quest has a plan for growth, and we invite you to join us.

225 Seven Farms Drive, Suite 204, Charleston, SC 29492

843.416.3932 | www.quest-sc.com

Doug Mattscheck is a man with a plan. His company, Quest Specialty Chemicals, has completed 10 acquisitions in 10 years. Today, it is the 12th largest coatings company in the United States and one of the largest privately held coatings companies in the world. Last year’s sales were $239 million and are on the rise again in 2014. During an August visit to Quest’s Massillon, Ohio, plant where automotive finishes are made, Mattscheck talked about his company’s growth plan.

you’ve just completed the 2013 acquisition and integration of
u.s. chemical & plastics to cap off a decade of an acquisition
per year. can you describe your company as it stands today?

Quest Specialty Chemicals is one of the largest privately held specialty coatings companies in the world. We operate six manufacturing facilities in the United States and Europe, where we make a broad range of coating and bonding materials for the automotive aftermarket, construction and industrial markets. Our niche is value-added, premium quality, environmentally conscious products bolstered with outstanding technical support and service. We target protected markets that are not economical for the largest high-volume coatings companies and are too technical for smaller competitors. What we want is to be diversified across products, end markets, customers and geographies. We want to hold leading market positions in markets in which we can obtain the highest margins and fastest growth.

in what markets does Quest have leadership positions?

We have three complementary divisions: Quest Automotive, Quest Industrial and Quest Construction, each manufacturing some of the leading brands in their respective markets. Quest Automotive is the largest non-OEM paint manufacturer in