Ardian, Tikehau Capital and the family shareholders of Dérivés Résiniques et Terpéniques (DRT) have entered exclusive talks to sell the company to Switzerland-based fragrance and flavour business Firmenich.
The deal remains subject to approval from employee representatives and the competition authorities.
Ardian bought a majority stake in DRT in November 2017 in a deal valued at approximately €1bn. The company's management retained a minority stake. Tikehau made a capital gain of around €153m from the sale of its entire stake in DRT, but reinvested some of the proceeds for a minority stake in the business.
Debt for the original acquisition was provided by BNP Paribas, Crédit Agricole CIB and Societe Generale. A spokesperson for Ardian confirmed at the time that senior covenant-light debt was arranged. According to Unquote sister publication Debtwire, senior debt of €455m and a recurring credit facility of €100m was provided to support the acquisition.
During the investment period, the company made one add-on acquisition in Finland and also acquired US-based Pinova in November 2016.
Emmanuel Laillier, head of private equity at Tikehau, told Unquote: "Our strategy was to enter as minority shareholders, to be actively involved and engaged alongside the lead investor and the family investors, to accompany the company in their transformation."
The potential buyer was a natural choice for DRT, as they had a previous business relationship, Laillier said. "DRT is an important supplier of Firmenich so it made sense for them to work together – it was natural for them to continue their cooperation."
Ardian had not responded to requests for comment at the time of publication.
In December 2014, Tikehau invested in a growth funding round for DRT, taking a 5.1% stake in the company.
The original investment was made via Tikehau's balance sheet. The investment was then transferred in a recent GP-led secondaries process, consisting of six assets, as reported by Unquote.
DRT produces plant-based chemical ingredients based on renewable sources, largely sourced from pine. The ingredients are used for industry applications ranging from agriculture to energy, as well as in fragrances, health products and nutrition.
Founded in 1932 and based in Dax, DRT has a headcount of 1,500 staff across sites in Europe, North America, South America and the Asia-Pacific region. It reported revenues of €350m in 2014 and reports a current turnover of €547m, according to its website.
Ardian – Thibault Basquin (managing director, head of Americas).
Tikehau Capital – Emmanuel Laillier (head of private equity), Christian de Labriffe (chairman of the supervisory board).
Dérivés Résiniques et Terpéniques (DRT) – Laurent Labatut (CEO).
Firmenich – Gilbert Ghostine (CEO).
Acquirer – Goldman Sachs International (corporate finance); Raphaël Financial Advisory (corporate finance); Bredin Prat (legal).
Vendor – Citigroup (corporate finance); Rothschild & Co (corporate finance); Latham & Watkins (legal); White & Case (legal).
Charcoal and natural additives company saw final bids from two banks and one direct lender
VCs including the Swiss Entrepreneurs Fund, BtoV and Ringier Digital Ventures also participated
Around 40 existing and new LPs, including British Patient Capital and the EIF, participated
Fund will invest in buyouts, recapitalisations and carve-outs of both profitable and underperforming businesses