CVC sells Parex to trade in $2.55bn deal

Francesca Veronesi
08 January 2019

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CVC Capital Partners has received a binding offer from Sika, a Switzerland-based speciality chemicals company, for Parex, a France-headquartered dry-mix building materials maker, valuing it at $2.55bn (CHF 2.5bn).

The deal is expected to generate annual synergies in the CHF 80-100m range, according to a statement.

The purchase price represents 11.3x enterprise value / pro forma EBITDA multiple (2019 estimate), which will come down to less than 8.5x enterprise value / EBITDA, including full run-rate synergies.

A bridge loan facility committed by UBS and Citi was provided for the transaction.

Sika, founded in 1910 and based in Baar, is a speciality chemicals company, providing bonding, sealing, damping, reinforcing and protection products for the building sector and the automotive industry. The business has subsidiaries in 100 countries and employs 18,000 people. It generated sales of CHF 6.24bn in 2017.

The completion of the transaction, subject to French works council consultation process and regulatory approvals, is expected in Q2-Q3 2019.

Previous funding
CVC Capital Partners acquired Parex (then known as ParexGroup) in 2014, from parent company Materis, investing via its CVC Fund V, closed on €10.74bn in 2008.

The company was valued at €880m at the time, with total funding of around €900m. The Parex division represented a little more than a third of Materis, which was the subject of a €2bn+ buyout backed by Wendel Investissement, European Capital and ICG in April of 2006.

Following the announcement of the deal, it emerged that the structure had been financed by €363m in equity, supported by a €550m Floating Rate Note (FRN). This made the deal the first to have been fully leveraged by an FRN in the bond market, Unquote reported at the time.

Under CVC's ownership, Parex grew sales from €750m in 2013 to around €1bn currently, according to a statement.

Company
Founded in France in 1978 by building products company Lafarge, Parex was part of Materis from 2001 until it was acquired by CVC in 2014.

Based in Issy-les-Moulineaux, Parex is a mortar manufacturer serving the construction industry, operating 74 plants and managing activities in 23 countries. The business generated sales of CHF 1.2bn and an EBITDA of around CHF 195m.

People
Sika – Paul Schuler (CEO).
Parex – Eric Bergé (CEO).