Advent in $1.2bn chemicals deal

The firm will acquire the coating resins division of listed chemicals company Cytec Industries. Advent plans to expand the business in emerging markets in Asia.

Advent International will invest $1.15 billion to acquire a majority stake in the coating resins division of NYSE-listed Cytec Industries.

The company’s Belgium-based coating resins division produces synthetic resins used in paint and ink production. The group generated approximately $1.6 billion of revenue during 2011 and has operations in Asia, Europe and the US. The transaction is expected to close during the first quarter of 2013.

After completing its investment in the division, Advent plans to “deepen its penetration in emerging markets such as Asia”, according to a statement.  Advent and Cytec estimate the coating resins industry to be a $30 billion global market.

The investment is understood to have been made using capital from Advent’s GPE VII fund, although Advent did not confirm this. The 2012 vintage fund has a $7 billion target and is expected to close soon, having already amassed roughly $6.7 billion, according to data provider Private Equity Connect.

Advent has been an active investor in 2012 – the firm made an offer last week for what would be its third healthcare-related business of the year, bidding €775 million for listed Dutch pharmaceuticals company Mediq – but Cytec represents Advent’s first investment of 2012 from its chemicals group. Its most recent chemicals investment came in September 2011 when it acquired a 50 percent stake in Madrid-based explosives company Maxam. 

Advent’s chemicals practice is led by Ronald Ayles, who was named a managing director and partner in 2009. The group has invested in more than 30 businesses in the chemicals industry during the past 25 years.