Double money on Materis exit

Carlyle Group, CVC Capital Partners and Advent International have more than doubled their investment in the French building materials business, selling it to LBO France for E1.1bn.

CVC Capital Partners, Advent International and The Carlyle Group have signed an agreement to sell French building materials group Materis to LBO France for E1.1bn.


In a statement, the three private equity firms said they had achieved a “strong exit” on the deal, with an exit multiple of more than two times the equity money invested.


In an auction coordinated by Rothschild, the investment bank, LBO France beat off competition from a group of rival private equity firms including Bain Capital, Clayton, Dubilier & Rice and Vestar Capital Partners. As expected, the deal was completed at around six times EBITDA, giving the deal a total value of around E1.1bn.


Materis, formerly Lafarge Speciality Materials, is a building materials company, composed of five divisions, including admixtures, aluminates, decorative paint, mortars and refractories. The company has over 5,000 employees and posted annual revenues of E1.2bn in 2002.


The consortium of private equity firms acquired the majority stake in Materis in January 2001 from Lafarge for an enterprise value of E890m. Lafarge retained a 33 per cent stake in the business.


Lafarge will raise E200m from the sale of part of its stake in Materis, according to a report on Bloomberg. The same report said that the three private equity firms had collectively invested E164m of equity in the transaction. Lafarge will retain less than ten per cent of Materis following the sale.


“Materis is a solid company with steady revenues and solid positions,” said Eric Adjoubel, managing director of Advent International in Paris. “It has made progress over the last few years and will certainly continue to do so.”


The sale provides CVC with its second European exit from the sector in 2003. In July, the firm sold the distribution and building products operations of Cementbouw Handel & Industrie to Irish construction group CRH in a deal worth E646m.


Carlyle is in the process of completing a further deal in the French building materials market. Alongside Eurazeo, the firm is backing a E400m buyout of Terreal, the French tiles and bricks manufacturer from parent-company Saint Gobain.