CD&R seals $1.8bn chemicals deal

The investment marks the third deal from CD&R's Fund IX, which is expected to close in the first quarter.

Clayton Dubilier & Rice will acquire specialty chemicals supplier Ashland Water Technologies for $1.8 billion, according to a statement.

Ashland Water Technologies supplies specialty chemicals for water treatment applications in the pulp, paper, power generation, mining, oil and gas refining, chemical processing and general industrial markets. About two thirds of the company’s revenue comes from its pulp and paper segment and the remaining third comes from the industrial water business. Ashland Water Technologies operates 31 manufacturing facilities in 17 countries.

The acquisition marks CD&R’s third investment from its Fund IX, which is still in market and is expected to reach its $6 billion hard-cap during the first quarter, Private Equity International previously reported. The fund had collected about $4.61 billion as of January, and will include a general partner commitment of $250 million, bringing the fund’s total to about $4.86 billion.  Fund IX launched in March 2013 with a $5 billion target.

CD&R declined to comment on fundraising.

Upon closing of the transaction, which is expected to be finalised in September 2014, CD&R operating advisor Lewis Hay will become the chairman of the company. Ashland Water Technologies chief executive officer John Panichella will continue to lead the business.

CD&R’s other Fund IX investments include PharMEDium Healthcare Corporation, a sterile drug compounding service provider for pharmacies and hospitals that the firm acquired in January, and a new company the firm created from acquiring Harsco Corporation’s infrastructure business and Brand Energy & Infrastructure Services in November 2013.

New York- and London-based CD&R has managed more than $19 billion in 59 investments since it was founded in 1978.