AXA buys ingredients and chemicals business for $155m

The private equity captive arm of the French insurance giant has bought a division of Canada-listed Atrium Innovations, with only one senior and one mezzanine provider financing the deal.

AXA Private Equity has bought the active ingredients and specialty chemicals division of Canada-listed Atrium Innovations, a Canadian chemical group, for $155 million (€98.6 million).

The division had revenues of $222 million in 2007, of which 55 percent came from Europe and 45 percent from North America, specifically Canada. It has an operating margin of around 8 percent, or $17.76 million in profits, giving the business an acquisition multiple of under nine times.

Managing director Eric Neuplanche said: “The aim is to grow the company to make add-on acquisitions in Europe and North America. Our goal is to acquire a platform in the US and then to grow the business in Europe.”

Banking and insurance company KBC has been appointed global arranger and agent for the entire senior debt of the transaction, while investment firm European Capital is arranging the mezzanine. The debt provision from only two providers is in contrast to many recent deals, where even relatively small mid-market transactions have been funded by a syndicate of banks and debt providers.

The company has a debt to equity ratio of roughly 60 percent to 40 percent, Neuplanche said.  “It’s very tough to have $15 million in commitments from a bank these days, but because of the strength of the company they chose to invest.”

As well as active ingredients and specialty chemicals, the division has a range of around fifty skin care and anti-ageing products. This business is growing at 20 percent per year.