After a number of troubling reports surrounding CVC’s assets in Asia, the firm revealed today it will sell portfolio company Taminco to Apollo Global Management in a deal worth €1.1 billion.
Taminco is specialist producer of the chemical alkylamine. Alkylamines and their derivatives are used to manufacture chemical products that have a wide range of applications including food and nutrition, energy, oil and gas, pharmaceuticals and water treatment.
CVC acquired the Belgian business in 2007 from AlpInvest Partners for a price tag of €800 million, according to Private Equity International at the time. CVC bought a 75 percent stake while Taminco’s management team took the other 25 percent. CVC is understood to have at least doubled its money following the exit.
Since the year ending 31 December 2007 until the same time in 2010, Taminco has seen its earnings before interest, tax, depreciation and amortisation rise from €110 million to €159 million, whilst sales have increased from €625 million to €715 million, according to a company statement. It invested heavily in its US operations and expanded into Asia through a joint venture with Mitsubishi Gas Chemical Company.
CVC and Taminco were advised by Bank of America Merrill Lynch, Goldman Sachs, Allen & Overy, Ernst & Young, Arthur D Little and URS Corporation.
A consortium of banks including Citigroup, Credit Suisse, Nomura and UBS, is understood to be providing debt financing to back Apollo's acquisition of the business.
At the close of the second quarter this year, PEI reported Apollo had $9.9 billion left of dry powder in its private equity funds. On its website it lists chemicals, manufacturing and industrials as three of its key focuses.
Laurent Lenoir, chief executive of Taminco said in a statement: “With Apollo we welcome a new investor with particular expertise in investing in chemicals companies, such as Momentive Performance Materials Holdings. Apollo is fully committed to endorse management’s plans and to continue the growth story while preserving our unique corporate culture.”
CVC has been under the spotlight in recent weeks over reports that its investment in Australian media group Nine Entertainment is in urgent need of refinancing. However, the firm denied the allegations. The firm was also yesterday revealed to have made a $1.6 billion bid for fast-food giant QSR and one of its companies KFC (Malaysia) Holdings. Neither CVC nor Apollo could be reached for further comment at press time.