SCOTTSDALE, Ariz.—Carlisle Companies Inc.'s largest business unit is about to get bigger.

The firm reached an agreement to acquire Accella Performance Materials Inc. from private equity owner Arsenal Capital Partners L.P. for $670 million in cash, in what Carlisle said was the largest acquisition in its 100-year history.

Carlisle said the deal is projected to close at the end of October, subject to regulatory approvals, and will be integrated with the firm's Construction Materials business.

"Accella Performance Materials will be an excellent fit within our Carlisle Construction Materials business," Chris Koch, Carlisle president and CEO, said on a conference call detailing the acquisition. "CCM has a long track record of increasing sales and has delivered returns in invested capital well in excess of our stated goal of 15 percent. CCM's history has been one of innovation, the introduction of new products and the development of platforms that have enhanced our position in the construction materials marketplace."

Robert Roche, Carlisle chief financial officer, said the deal brings the combined unit about $30 million of run-rate cost synergies, which are estimated to be achieved by the end of the second year. About two-thirds of those synergies will come from raw materials and procurement efficiencies—MDI, polyols and processing oils.

Another 10 percent of synergies will consist of in-sourcing certain finished goods to Accella that are currently third-party sourced by CCM.

Based in Maryland Heights, Md., Accella produces polyurethane based products for many markets and applications, generating about $430 million in sales with 10 production sites and seven research and development centers in the U.S., Germany and China.

Accella's polyurethane spray foam division is its largest unit, accounting for 56 percent of its sales, according to a Carlisle presentation detailing the acquisition.

Koch said the global polyurethane construction market is estimated at $15 billion, including spray polyurethane foam and liquid applied roofing. Both segments are projected to grow at 10 percent annually, which Koch said outpaces construction market growth.

A Carlisle spokesman added that insulation foams represented a $5 billion North American market in 2016 with spray foams accounting for 20 percent and is projected to grow at 10 percent annually through 2020. In both cases, the spokesman said fragmentation of the markets allow Carlisle to further grow inorganically.

"Accella brings profitable market diversity to our existing CCM business and establishes a new growth platform within an existing successful segment," he said. "This acquisition also ensures that CCM remains ahead of product and regulatory shifts in the insulation market."

Most of Accella's polyurethane spray foam business focuses on macro trends of energy efficiency. A Carlisle spokesman said Carlisle Construction Materials has evolved from a single-ply roofing supplier to a provider of a portfolio of construction materials, including energy conserving insulation products, which accounts for about one-third of CCM's segment revenue.

Carlisle has not been shy about investing in Construction Materials. Coming off a 2016 where it saw a 2.5 percent increase in sales to $2.05 billion, the unit accounts for about 55.4 percent of the overall company's sales.

Accella is the third major acquisition for the unit in 2017, reach a deal to add Drexel Metals Inc., which produces architectural standing steam metal roofing systems, in July. Based in Louisville, Ky., with facilities in Maryland, Colorado, Florida and Pennsylvania, the company employs 65 people and accounted for $50 million in sales.

In January, Carlisle acquired Arbo Holdings Ltd., a provider of sealants, coatings and membrane systems used for waterproofing and sealing buildings. Based in Belper, England, the firm accounted for $14 million in sales and 72 employees.

In addition to those deals, the spokesman said Carlisle has invested more than $500 million in innovation, facilities, new markets and acquisitions during the last several years, driving substantial improvements in revenue growths for the CCM unit.

"Accella Performance Materials has been a logical next step in what has been a key strategy at CCM for many years: innovation," the spokesman said. "In addition to well-established products, Accella opens up high growth adjacencies within the building envelope."

Accella said in a statement that since Arsenal's initial investment in 2012, its revenue increased sevenfold and EBITDA increasing eightfold. The firm has grown into a market leader in spray foam insulation, roofing solutions and polyurethane truck bed liners, all of which were identified by both firms as high-growth end markets.

Arsenal has invested significantly in Accella through many strategic acquisitions under its ownership. The most recent addition came in March when it acquired part of Covestro L.L.C.'s polyurethane foam business based in Spring, Texas, with 40 employees.

Other acquisitions made in the last five years include Dash Multi-Corp, MarChem, Arnco, Pathway Polymers, RTH/Ultimate Systems, RB Rubber, IPS Polymer Systems, Zeus Tyre Fill, Premium Spray Products, Coating & Foam Solutions, Burtin Polymer Labs and Quadrant Spray Foam.

"We look forward to joining the Carlisle famly of companies," Andy Harris, Accella's president and CEO, said in a statement. "Carlisle's focus on culture, technology, markets and value creation are highly complementary with Accella and provide significant opportunities for our customers."

In addition to its spray foam division, Accella operates three other units—its tire fill division accounts for 20 percent of its sales and according to Carlisle holds a global leadership position; the specialty polyurethane unit accounts for 13 percent, producing adhesives and binders, sealants and encapsulates, and elastomers; and its recycled rubber division accounts for 11 percent producing molded rubber products, fitness center flooring, equine matting and playground safety tiles.

Koch said Carlisle doesn't plan to divest Accella's other businesses.

"Those are good businesses," Koch said. "The one consistent thing with them is that they use raw materials that we're very familiar with. We look at those markets as an application of the same technology we're putting into spray foam. The markets today all have solid growth rates and nice profitability. I think we're going to take some time to assess those again and look at the opportunities that are there. As the portfolio sits today, it's a polyurethane platform and these things really make sense within the context of those raw materials and the processing of those raw materials."

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