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PAI Partners buys Armacell from Blackstone

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PAI Partners has acquired a majority stake in engineered foam producer Armacell alongside family office Kirkbi, which reinvested for a significant minority stake.

Armacell's management will continue to hold a minority stake in the business.

Unquote understands that the deal is based on an enterprise value of €1.4bn. The company's latest report shows a 2018 EBITDA of €106m.

Unquote sister publication Mergermarket reported that bidders in the process included Ardian, PAI Partners and CVC. US GP Clearlake was also a contender, via its portfolio company Unifrax.

PAI drew equity from PAI Europe VII, which held a final close on €5bn in March 2018 and was 40% deployed at the start of December 2019.

Blackstone said in a statement that it had invested in improving the company's energy efficiency during the investment period.

Previous funding
In 2000, CVC Capital Partners and Gilde Investment Management bought Armacell in a €304m MBO from Armstrong World Industries, where the company was formerly known as Armaflex.

In 2007, Investcorp bought Armacell in a €400m SBO from CVC  and Gilde.

Charterhouse acquired Armacell from Investcorp in a €500m SBO in April 2013.

Blackstone and Kirkbi acquired Armacell from Charterhouse in an SBO in 2016. The 2016 deal valued Armacell at €960m (10x its 2015 EBITDA). Deutsche Bank, BNP Paribas, ING and HSBC arranged a €560m senior debt package and €100m rolling credit facility to support the deal.

Company
Armacell produces engineered foams for thermal, acoustic and mechanical functions, including flexible foam for equipment insulation. It reported total sales of €610m in 2018 and has a headcount of 3,054.

The Luxembourg-headquartered company was founded in 1954 in Munster and operates 24 plants in 16 countries, with its main operations in Germany. Armacell was originally the insulation products branch of Armstrong World Industries, Armaflex, and was renamed Armacell in 2000.

People
Armacell – Patrick Mathieu (CEO).
PAI Partners – Mathieu Paillat (partner); Philipp Meyer, (principal).

Advisers
Vendor – Rothschild (M&A).

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