Bain Capital remains active in Europe, stringing up acquisitions of Celanese’s Trespaphan polypropylene film business and Rhodia’s basic chemical concerns alongside previously announced purchases of TotalFinaElf’s SigmaKalon paint unit (reported in Buyouts 11/04/02) and Johnson Outdoors Jack Wolfskin subsidiary earlier this year.
Bain teamed up with Dor-Moplefan, a strategic buyer, in its acquisition of Trespaphan. The two parties paid approximately 200 million euros, or $197.5 million, for the company, although exact terms of the deal were not disclosed. In its Rhodia deal, reports out of France estimated that the deal was valued at around 140 million euros. Both deals are expected to close before year’s end.
Even as the string of European deals appear to signal a focus for Bain in the chemicals industry, London-based Managing Director Dwight Poler said that’s not the case. “While these three acquisitions do have certain chemical aspects, they are highly unrelated companies,” Poler said, referring to the SigmaKalon, Rhodia units and Tespaphan deals.
Germany-based Trespaphan produces oriented polypropylene (OPP) film, which is the plastic covering used in food and cigarette package wrappings, as well as other uses. Poler notes that this company fits more into the packaging space than the chemical sector, and he adds that OPP film is steadily accumulating market share from the paper and foil markets. In 2001, the company recorded revenues of 281 million euros.
Meanwhile, in the Rhodia deal, Bain acquired the phenol, hydrochloric acid and soda ash production divisions of the company, which serve the intermediary chemicals market. The units together take in roughly 280 million euros in revenues a year. Also, Rhodia will retain a minority interest of less than 20% in the company.
These acquisitions, as well as the SigmaKalon and Jack Wolfskin deals, represent Bain’s focus – and the rest of the market’s – on carve-out transactions. These types of deals become available as the larger corporations contend with the need to pare debt and their inability to right a weak performer.
Corporations also face the fickle perceptions of the public markets, which can lead them to divest units if that’s what investors want. The weakness in the economy has highlighted all of these issues, which may account for a pickup in the buyout market. Also helping, antitrust issues make it more and more difficult for corporations to merge, as evidenced by the failed General Electric and Honeywell merger, which opens the door for the financial institutions to step in as a buyer.
“Our early experience in Europe helped manifest our current strategy of building a strong team comprised of both U.S. and local professionals to help large companies effectively divest certain assets, regardless of industry sector,” Poler said.
Bain has been active in Europe since the mid-1980s, and has maintained offices on the continent since 2000. Currently Bain has offices in London and Munich, which were opened by Poler and Managing Director Bob Gay, who is also based in London. Together these offices are staffed with approximately 25 people.