KKR, CSFB help create $2.5bn chemical group

Princeton, New Jersey-based Rockwood Specialties Group has announced it will acquire four businesses of German chemical company Dynamit Nobel, to create one of the world’s largest specialty chemicals companies.

Kohlberg Kravis Roberts portfolio company Rockwood Specialties Group, a Princeton, New Jersey-based specialty chemicals and advanced materials producer, announced it will acquire four businesses of German company Dynamit Nobel, the chemical arm of Frankfurt-based mg technologies.

The size of the deal was not disclosed.

KKR, Rockwood’s majority shareholder, will provide equity for the deal along with CSFB Private Equity, the global private equity arm of Credit Suisse First Boston, and from internal resources, according to a press statement.

The four acquisitions – Sachtleben, Chemetall, CeramTec and DNES Custom Synthesis – will merge with affiliates of Rockwood to create a worldwide specialty chemicals group with combined revenues of $2.5 billion (€2.08 billion), according to the statement. The four business focus on niche market products, including white pigments, surface treatment and lithium chemicals, ceramics and pharmaceutical intermediaries. Rockwood specialties include inorganic pigments, wood surface treatment and electronic chemicals.

Credit Suisse First Boston, Goldman Sachs and UBS arranged financing for the deal.

KKR made news last week along when it filed a registration statement for the proposed $750 million (€629 million) initial public offering of KKR BDC, a ‘business development company’ affiliated with the firm that will make debt and equity investments in public companies. KKR is joining a spat of private equity firms, including Apollo Advisors, Allied Capital and American Capital Strategies, in what has become a trend in private equity offerings as of late.

In yet another chemicals transaction in the past week, CSFB Private Equity’s DLJ Merchant Banking division last week, along with AEA Investors and MidOcean Partners, in selling off its specialty chemicals company Noveon to publicly traded Lubrizol in a transaction valued at $1.84 billion (€1.53 billion).