Endless pays cash for UK paint maker

The mid-market turnaround specialist has backed the buyout of Crown Paints from Dutch conglomerate Akzo Nobel in a deal fully underwritten by Endless’ second £164m fund. The deal value, though not disclosed, was lower than the reported £70m.

Endless, the UK private equity group which focuses on special situations, has backed the management buyout of Crown Paints from Dutch chemical and healthcare giant Akzo Nobel.

The value of the deal has not been disclosed, but a source familiar with the situation told PEO that it was lower than the £70 million (€88 million; $130 million) previously reported in the UK press. 

Paul Ince, manager of
Crown Paints-sponsored
Blackburn Rovers

The investment was made from Endless’ second fund, which closed on £164 million in February this year.

The transaction, which is debt-free, will probably be refinanced in the future, Endless’ managing director Warwick Ley told PEO.

“The seller had suggested they would welcome a high degree of certainty in terms of financing, as this was always going to be a highly complicated deal in all other aspects,” said Ley.

The deal involved a difficult carve-out of Crown Paints’ operations from Akzo Nobel’s Dutch operations centre and the buyout team encountered “many challenges” in cleansing the various the business of its parent company’s legacy. 

Andy Westbrook, corporate finance partner at Deloitte who worked on the deal, said in a statement:  “This was one of the most complex transactions seen in the market for some time.”

Warwick Ley joins the Crown Paints board, as does Graham Hallworth, who joins as non-executive chairman. Hallworth was a partner at Alchemy Partners between 2000 and 2002, with responsibility for deals and monitoring portfolio companies.

Akzo Nobel was forced to sell the company after its £8 billion takeover of ICI at the end of last year gave it ownership of Dulux, Crown Paints’ competitor in the UK, and a 50 percent share of the UK market.

Crown Paints is over 200 years old, has annual revenue in excess of £180 million and is the shirt sponsor of the UK’s Blackburn Rovers Football Club.

This is the fourth investment from Endless’s second fund, the previous deal being the buyout of several non-core divisions of steel company Amco Corporation.