Selenia To Be Bought Out For Third Time –

As a testament to the globalized state of today’s private equity arena, two international private equity firms-whose headquarters are located in the U.S.-recently met up in Europe to strike a sponsor-to-sponsor deal. Per terms of the agreement, Kohlberg Kravis Roberts & Co. will acquire FL Selenia SpA from Vestar Capital Partners in a transaction valued north of ?835 million (approximately $1 billion), including the assumption of debt.

Based just outside Turin, Italy, Seleniaclaims to be the largest independent producer of branded automotive lubricants in Europe. In addition to lubricants, the company’s products include anti-freeze, transmission and engine fluids for automobiles, trucks, tractors, earth moving equipment and marine and industrial applications. The company, which generates annual revenues in excess of ?550 million, will continue to be led by CEO Aldino Bellazzini, and the rest of its current management team.

Selenia comes from a strong line of private equity sponsors. In 2003, when Vestar acquired the company-which sells products under brand names that include Selenia, Paraflu, VS, Ambra and Tutela-it did so from Doughty Hanson & Co., one of Europe’s largest PE players, for ?670 million. Today Selenia serves about 19,000 customers through its sales network and reaches more than 150,000 consumers worldwide through its distributors-and there is still room to grow.

KKR Managing Director Johannes Huth said that Selenia offers opportunities to expand in the automotive aftermarket sector on a global basis. “We intend to support Aldino Bellazzini’s strategy to grow the business both organically and through acquisitions in Europe, Asia and the Americas,” he said, adding that Selenia’s growth plans are aligned with KKR’s “substantial capital resources,” long-term investing horizon, and global reach.

Selenia’s recent growth initiatives-organic and acquisitive-transformed the company from an Italy-centric lubricants producer to a global player with more than 1,000 employees and operations throughout Europe, South America and the United States. While it was under the ownership of Doughty Hanson, Selenia acquired U.S.-based Viscosity Oil from Pennzoil-Quaker State in 2000 and in 2003 it bought Italy-based Rondine. Meanwhile, Bellazzini said that a third add-on acquisition in the European aftermarket industry is “imminent”.

KKR has a fondness for the automotive aftermarket that was born out of past successes in the industry, such as its investment in AutoZone Inc., which went public via an IPO in 1991. Currently, New York-based KKR owns Auto-Teile-Unger Holding AG, a Germany-based operator of automotive retail stores and repair shops, which it acquired last year from Doughty Hansen for $1.75 billion. Selenia is the firm’s first acquisition in Italy.

Financing for this transaction will come from Mizuho Corporate Bank and HVB Group, while equity will come from KKR’s second European private equity fund, which raised ?4.5 billion before closing last month.

In aggregate KKR has invested about $4.8 billion of equity in 17 European companies since it completed its first transaction on the continent in 1996. These investments include Newsquest, Willis Group, Wincor Nixdorf, Legrand, Royal Vendex, ATU and MTU.