Cognis investors benefit from recap

German specialty chemicals company Cognis is preparing for a €300m floating rate second lien loan or note as part of a recapitalisation of the company. Sponsors Permira and Goldman Sachs Capital are extracting a €320m dividend and will also repay a €410m vendor loan, increasing debt by about €700m and taking leverage up by over a turn to 5.8x. This is the first recap of the company since it was bought out just over two years ago from Henkel.

Cognis was initially spun-out of Henkel in 2001 when Goldman Sachs Capital Partners, Permira and Schroder Ventures bought it for €2.52bn. Citigroup, Goldman Sachs, HVB Group and JP Morgan led the €1.63bn of senior debt which backed the buyout.