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GAC Chemical Corporation sold to Employees

July 16, 2015

What started as an idea in October 2014, became a reality on June 23, 2015. The founder of GAC Chemical Corporation decided he was ready to retire and wanted to sell his ownership in the business. Thus began a journey that ended with the sale of the company to its employees by way of an Employee Stock Ownership Plan (ESOP). “The company could have been sold to a competitor or another chemical manufacturer who wanted to gain access to the markets we serve. If that had been the case, the buyer probably would have moved the business out of state; and many local, good paying jobs would have been lost,” said David Colter, GAC’s President and CEO. “The ESOP was an attractive alternative, which provided business continuity.”

“ESOPs are gaining popularity as a financially attractive way to transition the ownership of small, closely held companies. When done properly, an ESOP provides the company with significant tax benefits and allows employees to share directly in the success of their company,” explains Susan Scherbel, Principal of Bellview Associates, who designed the GAC ESOP structure.

GAC Chemical is a strong company with consistent and predictable cash flow, which made it a good candidate for financing. To help get the deal to the finish line, the SBA provided a 75% loan guarantee through a program specifically designed for funding ESOP transactions. “This is one of the largest and most complex transactions the SBA has done in the state of Maine,” said Diane Sturgeon, Deputy Director for the SBA’s Maine District. “It was wonderful partnering with Bar Harbor Bank & Trust, to make sure GAC and its employees remain here.”

“Successful business owners spend years serving clients and providing a livelihood for their employees. When it’s time to retire, they want to see what they have built live on. I really enjoy being part of the team making the transition possible,” said Steve Gurin, SVP/Business Banking at Bar Harbor Bank & Trust. “GAC has been a fixture in Searsport for more than 20 years. This transaction makes it likely the company will be here for at least 20 more.”

GAC Chemical Corporation, formed in 1979 as General Alum & Chemical Corporation, has operated the Searsport, Maine facility since purchasing it in 1994 from Delta Chemical. The Searsport facility has a history dating back to the 1920’s as an expansion of the Summers Fertilizer Company of Baltimore. GAC Chemical manufactures and distributes industrial, specialty and fine chemicals (organic and inorganic). They are the leading worldwide producer of high purity ammonium sulfate and other manufactured chemicals including alum, aqua ammonia and specialty chemicals. GAC also offers chemical toll processing and contract manufacturing services coupled with supply chain logistics solutions at their 150-acre facility and rail terminal. GAC Chemical, referred to as “Maine’s Chemical Company”, received the Maine Governor’s Award for Business Excellence in 2014. GAC was also a co-recipient in 2015 of the Maine Foreign Investor Award for partnering with Dalegip Incorporated from Mexico on a specialty chemical manufacturing joint venture at the Searsport facility. For more information call 1-800-266-5155 or visit the website at www.gacchemical.com.

Bellview Associates, formed in 2001, is a financial advisory and consulting firm specializing in advising companies regarding ESOPs, and analyzing and designing ESOP transactions for its clients. The principals at Bellview Associates have provided financial advisory services and implemented transactions for clients ranging from Fortune 100 companies to entrepreneurs and family groups. Since its establishment, the firm has worked with and advised public and private companies and has implemented ESOP transactions totaling in excess of $1 billion in aggregate value. www.bellviewassociates.com

The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation. The SBA recognizes that small business is critical to our economic recovery and strength, to building America’s future, and to helping the United States compete in today’s global marketplace. Although SBA has grown and evolved in the years since it was established in 1953, the bottom line mission remains the same. The SBA helps Americans start, build and grow businesses. Through an extensive network of field offices and partnerships with public and private organizations, SBA delivers its services to people throughout the United States, Puerto Rico, the U. S. Virgin Islands and Guam. www.sba.gov

Bar Harbor Bank & Trust is a true community bank with more than $1.5 billion in assets. Founded in 1887, the Bank offers a full range of financial services for individuals, businesses, and non-profit organizations throughout Maine with 15 branch locations, from Topsham to Lubec. Bar Harbor Bank & Trust, Member FDIC, is a subsidiary of Bar Harbor Bankshares (NYSE MKT:BHB) and was named one of the 2014 Best Places to Work in Maine and one of the 2015 Top 200 Publicly Traded Community Banks in the nation by American Banker magazine. For more information call 1-888-853-7100 or go to www.bhbt.com.