Investcorp backs chemical MBO

The buyout house has agreed to pay Avecia, which it owns alongside Cinven, E375m for Stahl.

Investcorp, the venture capitalist, is backing the E375m buyout of chemicals manufacturer Stahl from the Avecia Group. The deal will enable Stahl to expand into new markets in particular the Asia Pacific region.

Stahl is one of five chemical companies operating in the Avecia Group, which Investcorp bought together with Cinven from Astra Zeneca in 1999 for $2.1bn. The company makes chemicals for leather finishings and operates 13 manufacturing plants and 21 technical service laboratories across 20 countries. Last year the business reported sales of E340m.

Philippe Costeletos, member of Investcorp’s management committee, said Stahl was a business with tremendous growth potential.

“The demand for leather goods is stable, if not growing. We will look to enter Asia, where we believe demand for leather will increase as people improve their individual wealth and we will also look at other vertical markets such as car interiors,” he said.

The deal is being financed with E240m of debt facilities including a E35m revolving facility underwritten by JP Morgan.

This is the second part of its business Avecia has sold in recent months. In June 2001, it sold Novacote, formerly part of the Stahl Group, to COIM, the Italian speciality chemicals business.

Investcorp focuses on four areas, corporate investment, real estate, asset management and technology. It has completed $19bn of transactions since it was formed in 1982.