KKR buckles sixth major deal of 2000
Kohlberg Kravis Roberts is more than making up for the relatively slow start it made in its European push, having completed is sixth major European deal this year in late September. The buyout giant has agreed to acquire Laporte’s pigments and additives, formulated products and compounds and electronics divisions for a total consideration of $1.175 billion. The acquired businesses have a combined turnover in the region of $800 million.
The sale, which is due to complete by the end of November, represents the culmination of a five-year disposal programme at Laporte, which has divested low-margin consumer businesses and a number of chemicals operations to concentrate on speciality organic chemicals products.
Following completion, KKR will merge the acquired divisions into a new company headquartered in Princeton, New Jersey, which will be run by the existing operating management, headed by Mike Kenny as president. Kenny was previously divisional chairman and a main board director at Laporte.
Commenting on the deal, Kenny points to the common theme in the acquired businesses, which focus on additives and materials processing, both world-wide markets offering significant expansion opportunities. He adds: “Our strategy is to capitalise on this by building our company both organically through new product development and through acquisitions. We believe that in partnership with KKR we can grow our business as a strong international player in additives and materials processing.
KKR and management are the only shareholders in the new group. Chase Manhattan, Merrill Lynch International and Goldman Sachs are providing the debt package for the deal.
The other major European investments notched up by KKR during the current year were Wincor Nixdorf, Wassall, Tenovis, FirstMark Communications Europe and KKF.net.