Permira plans Cognis exit

Cognis, a Luxembourg-based holding company for a manufacturer of speciality chemicals founded by Germany’s Henkel group, is to undergo a strategic review, according to a company press release. Earlier this year, IFR Buyouts revealed that funds advised by Permira and Goldman Sachs Capital Partners were preparing to exit from their majority shareholding in Cognis.

Cognis announced that “. . . in light of the attractive market environment, it has decided to explore and pursue various strategic options for the company”. Investment banks Goldman Sachs and JPMorgan were mandated to assist in the review.

Cognis, which employs about 8,000 staff, generated revenues of about €2.4bn in the first three-quarters of 2005 and achieved Ebit of €114m, Ebitda of €255m and operational cashflow of €202m in the same period.

Roughly 39% of its revenues came from its care chemical unit, which makes ingredients used in cosmetics, detergents and cleaners. The product line also includes functional products, oleo-chemicals, process chemicals and nutrition and health.

In 2001, a consortium consisting of Schroder Ventures Europe, Schroder Ventures Life Sciences and Goldman Sachs Capital Partners acquired Cognis from Henkel for an estimated US$2.3bn.

The transaction saw Goldman Sachs engage in a much-prized “triple play” as adviser, co-investor and lead arranger on senior secured debt facilities totalling €1.6bn.

A successful exit would be most timely for Permira, which is currently on the fundraising trail for Europe’s largest ever fund, with a target of €8bn.

Alex Wessendorff