AXA on verge of €227.5m Eliokem exit

The private equity arm of the French insurance giant will make twice its original investment when the deal is finalised.

AXA Private Equity is set to sell portfolio company Eliokem at a €227.5 million sale price, which would book it a 2x exit multiple.

Eliokem, the former specialty chemicals subsidiary of Goodyear, will be purchased by fellow chemicals company Omnova Solutions.

The sale is yet to be finalised, but a source with knowledge of the situation said AXA has granted Omnova exclusivity to purchase Paris-based Eliokem by December 31 at the above price, subject to consultation with Eliokem’s employees’ union and the usual regulatory red tape.

AXA had not been looking to sell Eliokem, but a number of trade buyers were interested in the company, with Omnova being chosen. There was no auction process.

Eliokem manufactures products such as decorative paints and coatings, oilfield chemicals and cementing. The firm has a dual strategy targeting niche markets in developed economies, as well as emerging markets like China, India and the Middle-East, which account for 45 percent of its sales volumes.

One platform acquisition was completed since AXA acquired the company, the polymer division of Indian engineering company Apar Industries for $27.5 million in 2008. During AXA’s ownership, the company’s annual turnover went from €148 million in 2006 to €201 million for the year ending May 2010.

AXA acquired Eliokem in a €130 million leveraged buyout deal in 2006 from Connecticut-based private equity investor Littlejohn & co, which acquired the company in 2001 for an undisclosed amount in a corporate carve-out from Goodyear.

Omnova is raising $425 million in long-term debt to fund the purchase, which includes some outstanding Eliokem debts.