Bridgepoint books 2.4x on CABB

Permira becomes the fourth buyout firm to back CABB, after Bridgepoint, AXA and Gilde.

Bridgepoint has agreed to sell CABB International, a German-based chemical manufacturing business, to fellow UK firm Permira, according to a statement.

The sale of CABB, which was sold in a limited auction process, will yield a 2.4x return for Bridgepoint, according to a source close to the matter. Financial details of the transaction, which remains subject to regulatory approval, were undisclosed.

Both Permira and Bridgepoint declined to comment beyond the statement.

CABB is a global supplier of fine and specialty chemicals. It is the leading supplier of monochloroacetic acid, a chemical used in agrochemicals, pharmaceuticals, cosmetics, flavours, fragrances and vitamins, according to the statement. CABB used to be part of Clariant, a Swiss chemicals company, and was established in 2003 following a reorganisation at the Swiss business.

Permira will be CABB’s fourth private equity owner. Gilde Buy Out Partners backed CABB in 2005 before selling more than 70 percent of the company to AXA Private Equity (which has since become Ardian) in January 2007, PEI reported at the time. Subsequently, AXA Private Equity sold CABB to Bridgepoint in March 2011.

Under Bridgepoint’s ownership, CABB completed the add-on acquisition of KemFine in Finland and established a joint venture with a Chinese state-owned chemicals business. Since 2011, profits have more than doubled, while revenues increased by more than 30 percent and more than 300 jobs were created, according to Bridgepoint.

Bridgepoint made the initial investment from its current €4.84 billion Bridgepoint Europe Fund IV. This vehicle, which is approximately 80 percent deployed, secured a 12-month investment extension last summer after it became apparent it would not need to fund as many add-on acquisitions as planned. It is understood Bridgepoint has so far returned more than €1.4 billion to LPs from this fund. The firm aims to raise a successor fund later this year, although the target and timing are unclear.

Permira will acquire CABB using capital from its Fund V, which hit its revised €5 billion hard-cap in late February, PEI revealed at the time. The fund is currently wrapping up legal paperwork ahead of its formal close, which is likely to be at approximately €5.2 billion after factoring in the additional €200 million to €300 million GP commitment.

This will be the fifth investment from Fund V. In February, Permira completed the €158 million acquisition of LegalZoom. Last December, it acquired Canadian health and nutrition company Atrium Innovations for €754 million. Last November, it agreed to acquire UK wealth manager and online investment broker Bestinvest from 3i Group, while in October, it bought R Griggs Group, the parent company of British footwear brand Dr. Martens, for £300 million. Following this investment, the fund will be approximately 20 percent deployed.