Investee Company – Cognis (Germany)
Investee Company Business Type – Specialty chemicals
Type of Financing – Leveraged buyout
Equity Providers – Schroder Ventures and Goldman Sachs Capital Partners
Equity Leader (Individual) – Thomas Jetter (Schroder Ventures)
Debt Providers – N/K
Debt Type – N/K
Debt Leader (Individual) – N/K
Equity Amount – N/K
Total Deal Value – euro2.6 billion
Other Advisors – Merrill Lynch
Comments- Henkel has agreed to sell its specialty chemicals division, Cognis, to Schroder Ventures and Goldman Sachs Capital Partners in a deal said to be worth euro2.6 billion. This is one of the largest German leveraged buy-outs to date. The final price was less than the original auction price of euro3 billion – euro3.5 billion but was at the larger end more recent estimates.
The deal has gone ahead with an opt-out clause being granted by Henkel which stated: “Due to the current uncertain conditions in the financial markets arising from the tragic events in the US, Henkel has granted to the investors the right to withdraw from the contract within two months”. No comment was made on any penalties that may be owed to Henkel if the buyout firms do withdraw.
Cognis generates roughly a quarter of Henkel’s revenues with sales of euro3.2 billion last year and 10,000 employees in almost 50 countries. The company makes extensive use of natural raw materials which makes it unusual amoung large speciality chemicals businesses.
This sale will enable Henkel to concentrate on their consumer brands, which include Schwarzkopf hair products, Svit home dry-cleaning products and Persil laundry products. Analysts also expect proceeds to go towards the continuation of Henkels programme of bolt on accessions in adhesives and detergents.