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Charterhouse books 3x on Armacell sale

The sale to Blackstone and KIRKBI marks the seventh exit from Charterhouse Capital Partners IX and follows that of Webhelp last week.

Charterhouse Capital Partners has agreed to sell European insulation manufacturer Armacell to funds managed by Blackstone and family-owned holding company KIRKBI A/S.

Financial details of the transaction were not disclosed, but it is understood the sale values Armacell at €960 million. The exit is understood to have generated a 3x money return for Charterhouse, which invested €520 million in 2013, and an internal rate of return of 54 percent.

The exit is the seventh from Charterhouse Capital Partners IX, a €4 billion vehicle launched in 2008 that invested in 13 portfolio companies. 

The sale of Armacell follows Charterhouse’s exit of outsourcing customer services company Webhelp last week, which generated a 3x return. Charterhouse owned that business for four years, during which revenues grew from about €200 million to a forecasted €725 million in 2015, while EBITDA rose from €42 million to €107 million. The company made four add-on acquisitions.

Of CCP IX’s exits to date, which also include ERM, Deb Group, Wood Mackenzie and Bureau Van Dijk, greeting card retailer Card Factory generated the highest return at 5.25x and an IRR of 47 percent.

Armacell manufactures high-tech foam insulation materials from its 23 facilities in 16 countries, which employ about 2,600 people globally. The company has regional headquarters in Germany, the US and Singapore and opened facilities in Russia and India under Charterhouse’s ownership, with plans for new premises in China and expansion into Japan, the statement said.

In early 2015, the company acquired Turkish insulation maker OneFlex and Canadian polyethylene insulation maker Thermo Polymers.

Through Charterhouse’s investment period the company’s EBITDA rose from about €60 million in 2012 to a forecasted €95 million in 2015, according to a statement from Charterhouse.

Improvements were made in sales, marketing and manufacturing, financial reporting and forecasting functions based upon new key performance indicators, and the expansion of the management team, Charterhouse said.

Armacell’s chief executive Patrick Mathieu will retain the role he assumed in 2012, a Blackstone statement said.

“We look forward to working with Patrick and the team going forward to capitalise on further growth opportunities, both organically and through acquisitions,” Blackstone head of private equity Lionel Assant said in the statement.

The transaction is subject to regulatory approvals and expected to close in early 2016.

KIRKBI is owned by the Kirk Kristiansen family, and its company stakes include 75 percent of Lego Group and 29.9 percent of Merlin Entertainments.

Charterhouse reached first close for CCP X on €1.5 billion in September as it seeks to raise €3 billion, as reported by PEI. The fund made its debut investment in October, buying French pharmaceutical business Cooper from Caravelle.