Arcapita, a Bahrain-based investment firm, is buying Paroc Group, an insulation manufacturer, from Banc of America Equity Partners Europe for €620m ($779m).
It is the first deal since Arcapital said last month it planned to double its issued equity capital to $800m to enable it to extend its investment activity.
A source close to the deal said Arcapita saw off competition from more than 60 rival firms in the first round of a highly competitive auction, which included interest from Texas Pacific Group, Carlyle, Warburg Pincus, BC Partners and Investcorp.
The source said the deal offered a combination of developed business in markets such as Finland and Sweden, plus potential growth into the emerging markets of Russia and the Baltic states.
The management of Paroc will continue in the company. Its net sales in 2005 totalled €346m and the company has 1,980 employees. Last year’s operating profit before depreciations and non-recurring items totalled €56m.
Lazard advised Bank of America EP; Rothschild advised Arcapita.