Carlyle acquires AkzoNobel's chemicals arm in €10bn deal

On the basis of its year-end balance sheet, AkzoNobel expects to receive a cash payment of €8.9bn. Following deduction of deal- and separation-related costs, as well as other previously announced liabilities, the net proceeds are expected to be around €7.5bn.

The GP will use two vehicles for the transaction – Carlyle Partners VII and Carlyle Europe Partners IV. Carlyle Partners VII, announced in June 2017, has a target of $15bn and its hard-cap was set at $18.5bn. An interim close was held in March 2018 on $15.57bn, according to Unquote Data. The vehicle was originally meant for North American deals.

Carlyle Europe Partners IV held a final close on July 2015 on €3.75bn, reaching the vehicle's hard-cap. The fund was meant to target European upper-mid-market companies across a wide range of sectors. According to Unquote Data, it was deployed at 72% before this transaction.

GIC is one of the three reserve management entities in Singapore, alongside the Monetary Authority of Singapore and Temasek.

A spokesperson for Carlyle confirmed the transaction will see co-investors backing the deal alongside Carlyle and GIC. The transaction is expected to be completed before the end of 2018.

AkzoNobel's management and supervisory boards were initially considering the options of either listing the divisions via a de-merger or selling to a private backer.

In February, news reports emerged that several bidders were competing against Carlyle, including a partnership between Advent and Bain; Apollo, joined by German speciality chemicals producer Lanxess; and Hal Investments, according to the Financial Times. Later on in the month, Apollo was said to have chosen to team up with one of the largest Dutch pension funds, PGGM.

AkzoNobel's paints, coatings and speciality chemicals divisions will now be two separate businesses.

The transaction is the third largest European PE-backed buyout recorded since 2007, according to Unquote Data, and the second largest ever recorded in Benelux, behind Intelsat.

Company
Headquartered in Amsterdam, AkzoNobel's speciality chemicals division makes an array of chemical building blocks ranging from chlorine and salt to ingredients for soap and pesticides. According to press reports, Akzo Specialty Chemicals posts an annual turnover of €5bn and employs a workforce of 12,000.

People
AkzoNobel – Thierry Vanlancker (CEO).
The Carlyle Group – Martin Sumner, Zeina Bain (managing directors).  
AkzoNobel Specialty Chemicals – Werner Fuhrmann (CEO).

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