In what would be one of the largest leveraged buyouts in German history, US-based private equity firm Bain Capital will sell the German chemical distribution company Brenntag to UK-based BC Partners for around €3 billion ($3.8 billion), a source close to the deal said.
If the deal goes through it would rival Fortress Investment Group’s €3.5 billion takeover of real estate company Gagfah Gemeinneutzige in 2004, as well as 2004’s €3.1 billion acquisition of German chemicals company Celanese by The Blackstone Group.
Brenntag has more than 300 locations in 50 countries and supplies acids, solvents and chemicals used in water-treatment to various industries in the manufacturing sector.
Bain acquired Brenntag along with its sister company Interfer from German rail operator Deutsche Bahn in 2003 for €1.4 billion. Since then the company’s sales have increased from €4.3 billion in 2003 to €5.3 billion in 2005. Bain will retain a minority investment in the company.
Although Bain’s initial purchase came after a year-long auction in which the firm competed with CVC Capital Partners and Blackstone, talks for this sale were held exclusively with BC Partners.
Stefan Zuschke of BC Partners’ Hamburg office said that the firm will prepare Brenntag for a potential stock exchange listing.
Bain Capital, the Boston-based buyout firm started by Massachusetts governor Mitt Romney, has been an active investor in Germany in recent years. Its current and past investments in the country include television station group ProSiebenSat.1 Media, clothing company Jack Wolfskin and paper company Suddekor.
The Brenntag acquisition is BC Partner’s first investment in Germany in more than three years. It last invested in the country in 2003 with the €505 million purchase of cable service provider TeleColumbus.