Astorg sells Kerneos to Imerys for €880m

The agreement comes after several parties from the private equity industry, such as Advent International, Cinven and Triton, had expressed their interest, without however offering a deal that was satisfactory enough for Astorg, a source familiar with the matter told unquote". 

In November, Kerneos had announced it would raise €505m of debt from BNP Paribas and Goldman Sachs to refinance its existing debt and repay a vendor loan used to finance the 2014 buyout by Astorg, Reuters reported at the time.

The loan, which according to the same source was aborted as a result of the current deal, would have included a €445m seven-year covenant-lite term B loan, as well as a €60m six-year revolving credit facility.

Between 2013-2015, Kerneos raised its turnover from €366m to €415m and its EBITDA from €73m to €91m. During the holding period, Astorg supported Kerneos's expansion by investing around €150m in the company in a combination of greenfield industrial projects, acquisitions, and capital expenditures to expand capacity at the company's US, Chinese and European sites, according to Astorg partner Thierry Timsit. The group also made investments in research and development.

The transaction should close in summer 2017, according to the GP.

Previous funding
In December 2013, Astorg acquired Kerneos from industrial group Materis. The business struggled with serious financial difficulties related to the financial crisis from 2008 onwards and was dissolved and reduced to the entity Materis Paints, rebranded as Cromology in 2015. The group was supported by French private equity group Wendel.

The deal had an EV of €600m, according to unquote" data. Wendel, which held a 75% stake in Materis, had acquired the business from LBO France for €2bn in 2006. Kerneos was set to spin out of Materis before the first half of 2014. The group had previously been owned by a consortium of funds including Carlyle, CVC and Advent.

Company
Based in Paris, Kerneos is a chemicals company focusing on calcium aluminates for the building chemistry and refractory industries.

It is a spinout of the now-dissolved group Materis, which specialised in the production of chemicals and materials used in the construction industry.

The company employs 1,500 staff across nine production sites in France, the UK, the US, China, Brazil and South Africa. It also operates two red bauxite mining operations in Greece. Kerneos posted a €415m turnover and €91m EBITDA for 2015 and sells its products in more than 100 countries.

Imerys is a Paris-headquartered French multinational company that specialises in the production and processing of industrial minerals. It is headquartered in Paris and is a constituent of the CAC Mid 60 index.

People
Astorg Partners – Thierry Timsit (partner); Stephane Epin (partner).

Advisers
Equity – Morgan Stanley (corporate finance).
Vendor – Lazard, Nicolas Constant, Guillaume Moliniver, François Guichot-Pérère, Jean-Philippe Bescond (corporate finance); Goodwin, Maxence Bloch (legal).

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