The New York-based private equity arm of J.P. Morgan Chase & Co., led by managing partner Dick Cashin, is buying the company at about 6.6 times 2011 Ebitda of about $60 million, a source said.

It will fund the leverage buyout with 40% equity, equivalent to $160 million, and a $240 million, senior secured term loan facility. The term loan comprises a U.S. dollar component of $204 million and a $36 million in euros portion, according to Moody's Investors Service, which rated the loan B1. The debt package also includes a $30 million revolver.

Commitments for the debt package are due March 15, according to a source. Pricing is around LIBOR plus 550 basis points with a 1.5% LIBOR floor and 98 original issue discount.

One Equity's acquisition, which hasn't been announced, will allow Sun Capital of Boca Raton, Fla., to exit the portfolio asset after six years of ownership.

Sun Capital acquired Sonneborn, the refined products division of Crompton Corp., in 2005, though it did not disclose the purchase amount nor the size of its equity outlay.

The company received clearance from the Federal Trade Commission on March 1.

Mahwah, N.J.-based Sonneborn, with facilities in New Jersey, the Netherlands, Latin America and Asia, supplies white oils, petrolatum, waxes and other hydrocarbon specialty products. It generated $407 million of 2011 revenue, half of which were sourced outside North America.

The loan has a $100 million accordion feature, giving the sponsors access to an additional $100 million under the same credit facility, the ratings agency said.

Moody's said the ratings are based on Sonneborn's "leading market positions in highly refined hydrocarbon markets," strong client relationships with multiple customers, exposure to "recession-resistant" consumer product end-markets, and the ability to pass through increases in raw material costs to customers.

That One Equity's purchase will have a "high level of cash equity" at 40% and is priced at a "relatively low valuation multiple" also is reflected in the ratings, it said. Pro forma leverage will be approximately 4.1 times Ebitda, Moody's said.

Moody's also said it expects Sonneborn to maintain its market positions, post "modest" organic growth, execute bolt-on acquisitions and generate positive free cash flow to help pay down debt over the next few years.

However, the rating agency added, the company was constrained by exposure to volatile feedstocks and concentration of its manufacturing in two main facilities located in Pennsylvania and Amsterdam.

"The company will have sufficient wiggle room for debt covenants over the next 12 to 18 months as the company generates strong margins and free cash flow, assuming raw material prices remain near current levels," Moody's said.

Sonneborn, which dates back to the mid-1800s, was a pioneer in white mineral oil manufacturing and production of petrolatum for use in medical salves and ointments in North America.

Since Sun Capital's buyout, revenue rose from about $265 million in 2004 to $407 million. Part of the growth came from add-ons in 2010. Sonneborn bought two divisions from the bankrupt specialty chemical maker Chemtura Corp. for an undisclosed amount.

The sale, approved by the U.S. Bankruptcy Court of the Southern District of New York, included the natural sodium sulfonates and oxidized petrolatum product lines of Chemtura's petroleum additives business, customer information and working capital.

In December 2010 Sonneborn bought the assets of DSM Special Products BV, a manufacturer of toluene oxidation products, also for an undisclosed amount.