Bain Capital had a busy October, coming to terms with TotalFinaElf to acquire its SigmaKalon paints business, and reportedly the firm has also been in negotiations with Rhodia to take control of three of its chemical units.
Terms of the SigmaKalon deal were not disclosed, although reports out of France said Bain had been offering roughly EURO1 billion for the decorative paints manufacturer. The deal is still subject to regulatory approval.
SigmaKalon is the second-largest paints business in Europe, last year pouring in EURO112 million in operating income on sales of EURO1.67 billion. The unit is a part of TotalFinaElf’s Atofina chemicals unit, which has been cutting costs in order to refocus its business. In 2000, Atofina outlined plans to shed EURO1.5 billion in assets by 2003. In July of this year, news surfaced about a possible transaction between TotalFinaElf and Finland-based Kemira for SigmaKalon, but that deal fell through when TotalFinaElf reportedly would not bend on its EURO1.5 billion asking price.
In the final auction, Bain reportedly beat competing bids by Permira, a UK private equity firm, and a team composed of Goldman Sachs Capital Partners and Industri Kapital, a Sweden-based private equity shop. TotalFinaElf said the deal would allow SigmaKalon an opportunity to better develop its growth prospects in an operational, commercial and financial framework better suited for its activities.
Meanwhile, reports surfaced earlier in October that Bain Capital is in negotiations with Rhodia, a France-based specialty chemicals maker, to buy three of its units. French news reports have estimated that the deal could be valued at around _140 million. The transaction would include Rhodia’s carbonates, phenol and hydrochloric acid units. Rhodia has also been cutting costs as it moves to reduce its debt. The company has targeted cuts of approximately EURO500 million.
Bain Capital has been investing in Europe since 1989. In one of its more notable deals this year, Bain, along with Texas Pacific Group and Goldman Sachs Capital Partners, agreed to acquire Diageo’s Burger King chain. That deal has received both EU and U.S. regulatory approval, but The Times reported at the start of October that the deal is being threatened by the firms’ uphill battle to finance the transaction.
Bain declined to comment on the deals.