Wendel-backed Stahl acquires BASF leather chemicals activity

Alice Tchernookova
24 March 2017

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Backed by Wendel since 2006, Dutch speciality chemicals group Stahl has reached an agreement to acquire BASF’s leather chemicals activity.

BASF will receive a 16% stake in Stahl and a cash consideration of €150m – Wendel remains the controlling shareholder of the company with around 63% of the capital.

Stahl will finance the acquisition with a mix of cash and additional debt. Since the refinancing of its balance sheet in 2016, Stahl reports being currently leveraged at a ratio of 2.95x EBITDA, including €80m in available cash.

According to the company, the current financing documentation offers the possibility of releveraging to 3.5x projected combined EBITDA for selected acquisitions.

The acquisition will include BASF's leather chemicals production site of L'Hospitalet in Spain. In addition, under mid-term and long-term supply agreements, BASF will supply determined volumes of leather chemicals products to Stahl from its current manufacturing facilities, which will not be carved out, the company said in a statement.

The deal will bring Stahl an extra 210 employees, 110 of whom are based in Asia. The combined entity will represent circa €850m in revenues, and €200m in EBITDA. Recent acquisitions by Stahl have included Eagle Performance Products and Viswaat Leather Chemicals in 2016.

The transaction is subject to regulatory approval and should be closed in Q4 2017.

Previous funding
In 2002, Investcorp acquired Stahl from the Avecia Group for €375m. In 2006, The Carlyle Group and Oranje-Nassau Groep – an affiliate owned by Wendel Investissement – acquired the business from Investcorp for approximately €520m. The equity invested by the consortium amounted to approximately €171m, with both parties investing on an equal basis. At the time, a €460m debt facility was arranged by JP Morgan and Lehman Brothers.

In 2009, Stahl obtained the support of all its lenders to proceed with the restructuring of its debt. Carlyle however did not participate in the restructuring. The deal allowed the company to reduce its debt by almost 40%, to less than €200m.

As part of the restructuring, Wendel provided €60m in fresh equity in order to buy back senior debt. The GP almost doubled its stake from 48% to 92%. The balance was held by second lien and mezz lenders – cancelling €28m and €64m of debt respectively – and by management, according to unquote" data.

In April 2014, ABN Amro and Commerzbank took part in a €295m refinancing. The funding allowed the company to acquire Coriander Group, and to partially redeem shareholder loans. The same year, Stahl merged with Clariant Leather Services.

Company
Founded in 1930, the Stahl group manufactures process chemicals for leather products, performance coatings and other substrates. Headquartered in Waalwijk, the Netherlands, the group employs 1,800 staff across 13 manufacturing sites and 38 laboratories in 24 countries.

Stahl services clients in the automotive, industrial, interior design, leisure, apparel and accessories sectors. It posted sales of around €200m in 2016.

People
Wendel Investissement – Frédéric Lemoine (chair of executive board).
Stahl – Huub van Beijeren (CEO).