Private Equity News & Analysis

CVC ready to buy Aventis unit

The private equity firm has agreed to a leveraged buyout of Animal Nutrition, the feed additives business sold as part of Aventis’ restructuring.

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Aventis, the Franco-German life sciences conglomerate, is a well-known name in the European LBO market, periodically providing equity sponsors and debt providers alike with significant chunks of business.

CVC Capital Partners, the European buyout house, has become the latest beneficiary, announcing today that it has agreed to buy for an undisclosed sum Aventis Animal Nutrition, the nutritional feed additives business which in 2000 generated revenues of just under E600m.

Debt financing will be provided by a syndicate of banks led by JP Morgan and Barclays Capital and also comprising Natexis Banques Populaires, The Royal Bank of Scotland and ABN Amro Bank.

According to a source close to the syndicate, the debt tranche totals less than E200m, two thirds of which will be used to finance the acquisition and the remainder will be working capital. Gearing is understood to be low, at a conservative EBITDA multiple.

For the vendor, the disposal is part of a large restructuring that earlier this year produced the LBO of Messer Griesheim, the German industrial gases business sold to Allianz Capital Partners and Goldman Sachs in one of the year’s landmark transactions.

Considered a small part of Aventis’ portfolio, the animal nutrition unit was put up for sale last year when Aventis decided there were few synergies between it and the other core- and non-core divisions of the group.

The deal is subject to closing conditions and expected to close in the first quarter of next year. CVC said the business, headquartered in France and operating in Europe, Asia, Australia and the Americas, was well positioned in a sector that was likely to see strong growth going forward. Anthony Fobel led the deal for CVC.

CVC will be keen to close the deal soon following recent disappointments over the failed acquisition of Lenzing, which was blocked by the European Commission due to anti-trust considerations, and the planned purchase of VAW from Eon, which ran into tax-related difficulties.

Aventis’ restructuring is ongoing. In October, the group sold Aventis CropScience, its agrochemicals subsidiary, to Bayer, the German pharmaceuticals and chemicals concern.