SK Capital reinvests in Archroma via refinancing

The development comes seven months after the GP began exploring a potential CHF 1.5bn EV sale of the company, according to a report by Reuters at the time. Evercore and HSBC, which provided M&A advisory services on the latest deal, were at the time reportedly tasked with finding a buyer for the company.

Under SK's tenure to date, Archroma has undertaken an international acquisitive expansion strategy, most recently acquiring Italy-based wine and beverage equipment manufacturer Innotec and the active pharmaceutical ingredients business of New York-based Perrigo Company, with both transactions taking place in August 2017.

Following the latest deal, the company will continue to pursue bolt-on opportunities, according to a statement.

Debt
The business has secured renewed credit facilities including a multi-currency revolving credit facility, a facility for capital expenditure, and term loans. HSBC and Bank of America Merrill Lynch International acted as lead arrangers, global coordinators and bookrunners in the refinancing. Credit Suisse, UBS and ICICI Bank UK acted as mandated lead arrangers.

Previous funding
SK acquired Archroma, then the textile chemicals, speciality paper and emulsions divisions of Clariant Corporation, in January 2013 in a deal giving the business an EV of CHF 502m.

In July 2015, Archroma was refinanced, securing senior secured term loans and a revolving credit facility totalling $515m. The fresh funds were earmarked for the refinancing of the company's existing debt and to support the acquisition of BASF's textile chemicals business.

Company
Founded in 2013 via a spin-out from Clariant and headquartered in Reinach near Basel, Archroma provides speciality chemicals for use in the textiles, packaging, paper, coatings, adhesives and sealant segments. The company was reportedly expected to generate EBITDA of CHF 180m in its most recent financial year, up from CHF 80m at the time of SK's initial investment.

Archroma has a headcount of 3,000 across 35 countries and has 24 production sites.

People
SK Capital Partners – Barry Siadat, Aaron Davenport (managing directors).

Advisers
Equity – Kirkland & Ellis (legal); Valence Group (corporate finance); Evercore (M&A); HSBC (M&A).

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