European buyout firm Permira has made a speedy exit from its investment in TFL Holding, a German-based leather chemicals business acquired in 2001.
Odewald & Compagnie, the German private equity house, has agreed to pay more than E200m for the business, according to sources close to the transaction.
Permira, formerly Schroder Ventures, backed a E170m management buyout of the business in March 2001. The deal, sourced out of the firm’s Italian office in Milan, was backed with acquisition finance arranged by Intesa BCI and was made from the E3.5bn Permira Europe II fund.
“The management team, in a very short period of time, has expanded the product range and geographic reach of [TFL],” said Nicola Volpi, partner at Permira, “[It] has achieved enhanced profitability through organic means, strategic acquisitions in Italy, US and India and the start-up of a green-field factory in China.” The firm declined to reveal IRR and multiples on investment.
TFL was created by the spin-off of the leather chemicals businesses of Röhm/Stockhausen and Ciba in 1996. The company, headquartered in Weil am Rhein, Germany, has operations in 17 countries, providing application and service systems to the leather processing industry with innovative chemicals, dyes and finishes. The company reported sales in 2002 of E250m.
Odewald has invested in TFL from its second fund, which closed on E400m in 2001. The firm, which was founded in 1996 by Jens Odewald, raised E110m for its first fund in 1998 and has now invested in six companies and 16 add-on acquisitions. “TFL has an excellent track record and potential,” said August JP von Joest, a partner at Odewald. “We are looking forward to partnering with the management team in order to further develop the business.”
Permira was advised on the transaction by Credit Suisse First Boston and Freshfields Bruckhaus Deringer. Societe Generale arranged and underwrote acquisition finance for Odewald.