Triton makes 3.4x on final divestment of Orion, 37% IRR

Triton sold its remaining 8% stake in the company at $22.99 per share, representing gross proceeds to Triton Fund III of $120m. Triton III held a final close on €2.25bn in February 2010 and was 100% invested by December 2013, according to unquote" data.

The GP listed Orion on the New York stock exchange in 2014 at $18 per share, three years after it acquired the business alongside Rhone Capital in a carve-out from Evonik Industries. Of the shares, 32.7% were sold in the IPO, according to a source close to the situation.

Under Triton's ownership, Orion introduced growth and technology-focused corporate functions, established the new brand after the carve-out and strengthened the board.

It also embarked on a €120m growth capex programme and acquired a new production plant in China, partly funded by the GP. As a result, the company's cash generation has greatly improved. At the time of acquisition it generated a 9.6% EBITDA margin (€155m EBITDA from €1.194bn in sales) and the most recent figures show an EBITDA margin improvement of almost 10 points to 19.4% (€227m EBITDA from €1.165bn sales for the financial year ending September 2017).

Previous funding
Triton and Rhone carved out Orion (then the Carbon Black Division) from Evonik Industries, which was then owned by CVC Capital Partners, in April 2011. CVC retained a minority equity stake in the deal, which had an enterprise value of €870m, according to the source.

The company was listed on the New York Stock Exchange in July 2014 at $18 per share, raising $351m through the offering of 19.5 million shares. Existing shareholders retained 61.5% of the shares at the time of the IPO while management retained 5.8%, according to a source close to the situation.

Company
Orion is a supplier of carbon black, a powdery form of carbon that is customised to enhance certain physical, electrical and optical properties of various materials. It offers specialised carbon pigments and mechanical rubber goods used for coatings, printing inks, polymers, rubber and other applications.

The company has 1,500 employees worldwide, and operates 14 global production sites and four technology centres. It supplies 2,100 customers across more than 90 countries. Its customers include BASF, DuPont, Bridgestone and Michelin, among other blue-chip companies across a wide range of industries.

People
Triton Partners – Martin Huth, Claus von Hermann (investment advisory committee); Rohin Jain (investment professional).

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