Charterhouse sells Lucite

The long-running saga of the sale of Lucite by owners Charterhouse Capital Partners has reached a conclusion with the acrylic specialist acquired by Japanese group Mitsubishi Rayon for US$1.6bn.

London-based Charterhouse had tried to sell Lucite during the first half of 2006, but failed to do so, with the company citing market turmoil as the reason for pulling the plug. It was also rumoured to be up for sale in 2005 for around US$2bn.

The Southampton-headquartered company has been a portfolio company of the firm since 1999. It was created from the acrylic businesses of DuPont and ICI, and was sold to Charterhouse for just under US$1bn. It is the world’s leading manufacturer of methyl methacrylate (MMA) and owner of the globally renowned Lucite and Perspex brands.

Ineos Group also holds a minority stake in Lucite which Mitsubishi Rayon plans to acquire at a later date.

For Mitsubishi Rayon, the deal gives it greater exposure to European and North American markets, which it hopes will speed up development of business in emerging markets such as Eastern Europe, Russia and South America.

The purchase will also expand the range of products it offers and allow it to lower distribution costs thanks to the shared use of logistics facilities, improved procurement efficiency due to joint purchasing, and lower sales costs as a result of the rationalization of overheads.

The deal also sees Lucite shore up its debt repayment programme. The company has secured consent from a majority of its lender group to waive maintenance covenants for the next two quarters. Lenders were offered a 25bp fee to consent to the waiver. Senior debt investors will be taken out at par.

This latest deal is a further example of the increased appetite of Japanese corporates for European assets, driven in large part by the falling pound against the yen.

According to Thomson Reuters data, acquisitions abroad by Japanese companies total US$61bn this year, smashing 2006’s full-year record of US$44.2bn. Japanese private equity firms are also becoming more active – see page 24 for more details.