Japanese conglomerate Itochu Corp. has retained financial advisers for a carve-out of small adhesives unit Helmitin Inc., sources familiar with the matter said.

Itochu has tapped KPMG Corporate Finance Inc. to run an auction process for the unit, which generates Ebitda of less than $10 million, the people said.

KPMG hasn’t distributed financial data materials for Helmitin, though teasers are expected to land shortly after Labor Day, the sources said.

Given the size of the platform, Helmitin’s advisers are expected to market the business largely to strategics as an add-on, though sources said private equity firms with experience in adhesives and specialty chemicals will likely be invited to participate.

Firms that fit that mold, based on The Deal’s database, include Quad-C Management Inc., SK Capital Partners LP and Dominus Capital LP, among several others. These firms have all built sub-$10 million Ebitda adhesives platforms and sold them to larger firms in past years.

For instance, Quad-C sold adhesives distributor Krayden Inc., which it built to north of $20 million in Ebitda, to Audax Private Equity in April, and the Charlottesville, Va., firm also was involved in the very early days of adhesives manufacturing platform Royal Adhesives & Sealants LLC, which it sold to Arsenal Capital Partners LP in 2010. Arsenal went on to sell the business to American Securities LLC, which shortly after sold it to adhesives giant H.B. Fuller Co. (FUL) for almost $1.6 billion.

New York-based SK Capital sold the adhesives division of its former platform Tri-Tex Co. to PE-backed adhesives maker Meridian Adhesives Group in December 2021, while fellow New York firm Dominus Capital LP sold Dalton, Ga.-based flooring adhesives maker W.F. Taylor LLC to Meridian Adhesives in September 2018.

It’s unclear, though, if Helmitin will meet these firms’ most recent investment criteria given larger fundraises in recent years. Other lower middle market firms with investment criteria in the range of $3 million to $15 million of Ebitda that have added platforms in the chemicals and materials sector in the past few years include Tide Rock Holdings LLC and Century Park Capital Partners LLC, according to The Deal’s database.

Editor’s note: The original, full version of this article was published Aug. 31, 2023, on The Deal’s premium subscription website. For access, log in to TheDeal.com or use the form below to request a free trial.