Permira consortium in chemicals buy and build

Specialty chemical producer Cognis, which is controlled by Permira, Goldman Sachs and Schroder Ventures Life Science, has acquired Laporte Performance Chemicals.

A private equity consortium led by Permira has announced the bolt-on acquisition of Laporte Performance Chemicals to Cognis, its global specialist chemicals producer.

No financial details of the transaction have been disclosed. The purchase is expected to be the first in a series of add-on acquisitions to be carried out by Cognis ahead of a possible flotation in 2005 to 2007.

Laporte has two production and development sites in the UK and 220 employees.  In 2001, the company recorded £64m in sales.

Cognis is financing the acquisition without raising any additional debt.

Permira, formerly known as Schroder Ventures, together with Goldman Sachs Capital Partners and Schroder Ventures Life Science, bought Cognis, the speciality chemical division of Henkel, for E2.6bn in 2001. The deal is one of the largest LBOs in German corporate history and one of the biggest ever seen in the chemicals sector.

Laporte will be integrated into the functional products business unit of Cognis. The acquired activities complement Cognis’ existing product portfolio, in particular in automotive coatings and synthetic lubricants.

Laporte Performance Chemicals is the final part of a sale imposed on its parents, Degussa. The European Commission ruled Degussa had to dispose of some of its assets when it bought Laporte.

Laporte Performance Chemicals manufacturers components for environmentally friendly paint systems and synthetic lubricants.

Cognis is a worldwide supplier of innovative specialty chemicals and nutritional ingredients with 9,100 employees in around 50 countries.

Deloitte and Touche were corporate finance advisers to Degussa, while Slaughter & May advised on the legal side. Cognis was advised by Cleary, Gottlieb, Steen and Hamilton.