MSSA Sold in Secondary Buyout –

Royal Bank Private Equity has acquired French specialty chemicals business Metaux Speciaux (MSSA) in a secondary buyout transaction. The deal is the first French transaction for the firm and marks an exit for previous investors in the company, Duke Street Capital, SPEF (Banques Populaires) and Parcom Ventures.

The refinancing has been completed through a special acquisition vehicle, Alkaline SA, which is assuming 100% control of MSSA. The transaction will allow the company to increase sales of sodium, re-launch the production of metallic lithium and widen its activities in the areas of chloride products and organometallical components. In addition, an active policy of external growth in the field of chemical specialties will be pursued.

MSSA was bought via an MBO from Pechiney in November 1997. It was acquired by International Alkaline, a company owned by its managers, and Duke Street Capital (at the time Hambro European Ventures), who paid Ffr16 million for a 30% stake in the company and SPEF and Parcom Ventures which both also acquired a 30% stake.

At the end of 1998, MSSA signed a contract with U.K.-based Octel, for the supply of significant quantities of sodium. This enabled the company to invest Ffr265 million into its Pombliere factory, doubling its manufacturing capacity thanks to the installation of a new generation of electrolysis cells, unique within the industry.

Under the management of Jean-Marie Paepegaey, who remains chief executive of MSSA, revenue will have grown from Ffr220 million to Ffr371 million for the year ending 31 December 2001. MSSA currently has over 200 employees.

Fred Chauffier, managing director of Duke Street, said, “This transaction further demonstrates Duke Street Capital’s ability to identify and develop buy-and-build opportunities in Europe.”

He adds that companies in France will be increasingly attracted to private equity finance, developing businesses with Europe-wide market positions and creating value for shareholders, management and employees alike.