CD&R to buy Culligan from French parent

Clayton Dubilier & Rice, the US-based global investor, says it has reached a definitive agreement to acquire Culligan International from Veolia Environnement of France for $610m.

Culligan International, the US-based water products manufacturer and distributor, is to be acquired by New York private equity firm Clayton Dubilier & Rice (CD&R) from French environmental services firm Veolia Environnement for $610 million (€499 million). The deal, which is subject to regulatory approvals, is expected to close within the next few months.

Illinois-based Culligan is a maker and distributor of water treatment products and bottled water for household and commercial use in North America and Europe. The firm, which was founded by Emmett Culligan in 1936, has 3,000 employees, a network of 1,000 owned and franchised dealerships in the US and Europe, and posted annual sales of $682 million in 2003.

“This transaction bears many of the hallmarks of our most successful investments,” said Donald Gogel, president and chief executive officer of CD&R. “It is a carve-out of a non-core division from a major multinational parent that we believe we can build and enhance with our operationally focused investment model.”

A statement said that CD&R operating partner George Tamke would be “involved in the transaction”. Tamke served as lead operating partner for CD&R in the firm’s highly successful investment in document solutions firm Kinko’s, where he also served for a period of time as interim chief executive.

The deal is CD&R’s second this year, following its $1.65 billion acquisition of VWR International, the global laboratory supplies distributor, from Merck of Germany in April. As well as selling Kinko’s to FedEx Corporation, CD&R recently sold Jafra Cosmetics to Vorwerk & Co and completed a secondary offering of part of its interest in Sirva, the Chicago-based global relocation services provider.

Bank of America and Lehman Brothers advised CD&R on the Culligan deal. Bank of America is also leading the provision of debt financing alongside BNP Paribas and Citigroup. Debevoise & Plimpton acted as legal adviser to CD&R.