Oaktree in specialty chemicals deals

The distressed debt specialist has purchased publicly-listed Nevada Chemicals for $94m while also acquiring CVC-owned Evonik Industries’ North American cyanide activities. Oaktree made the investment from its fourth dedicated private equity vehicle.

Oaktree Capital Management has agreed a deal to purchase a series of specialty chemical producers across North America, including the $94 million (€67 million) acquisition of sodium cyanide maker Nevada Chemicals.

The Los Angeles-based private equity firm, known primarily for its success in the distressed debt and turnaround space, has tendered a cash offer of $13.37 per share for the common stock of Nasdaq-listed Nevada Chemicals, a 36 percent premium over the company’s closing trading price on Friday, just before the deal was announced.

Oaktree made the investment from OCM Principal Opportunities IV, its $3.3 billion private equity vehicle. Nevada Chemicals’ board of directors has endorsed the transaction.

The Salt Lake City, Utah-based company specialises in the manufacture and distribution of liquid sodium cyanide, a chemical solvent involved in the processing of oxide ore into gold.

In the transaction, Oaktree partnered with an acquisition vehicle affiliated with Cyanco, another producer of liquid sodium cyanide jointly owned by Nevada Chemicals and by Evonik Industries, a German specialty chemical company.

As part of a related deal announced today, Oaktree has purchased all of Evonik’s North American cyanide activities, including Cyanco, for an undisclosed amount. Oaktree will also pick up two other formerly Evonik-owned division, Cyplus Canada and Cyplus Corporation.

In June, London-based private equity firm CVC partners purchased a 25 percent stake in Evonik for $3.7 billion.