CD&R to pay $477m for stake in JohnsonDiversey

The deal includes a $1.9bn debt financing package from up to 11 lenders.

Clayton Dubilier & Rice will pay $477 million for a 46 percent stake in JohnsonDiversey, a maker of commercial cleaning, sanitation and hygiene solutions.

The deal will include a debt financing package of $1.9 billion from up to 11 lenders, including Goldman Sachs, Citi, Barclays Capital, HSBC, Natixis, Rabobank and RBC.

The investment will be the second from CD&R’s eight buyout fund, which is expected to collect its target $5 billion by year’s end. The deal is part of a larger recapitalisation effort valued at $2.6 billion to provide the company with capital for growth.

The Johnson Family of Racine, Wisconsin, will retain 50 percent ownership of the company. Unilever will keep a 4 percent interest in the company.

The company has more than $3 billion in annual sales in more than 175 countries, providing commercial cleaning products to the building, retail, healthcare and food and beverage sectors, as well as to public organisations like the National Health Service in the UK and the State of New York. Its private sector customers include Walgreens, Coca-Cola and PepsiCo.

New products the company is developing include a training guide to respond to the H1N1 flu virus.

Debt financing was a challenge to line up in the current environment, according to Roberto Quarta, a partner with CD&R.

“The fact that we were able to get it shows the markets are opening up and the attitudes of banks to the investment itself,” Quarta said.

CD&R recently agreed to invest $250 million in NYSE-listed NCI Building Systems, taking a 72 percent ownership stake in the company. The deal has been delayed as the company negotiates with bondholders over an exchange offer.