Eurazeo to sell Seqens stake to SK Capital et al.

Further existing shareholders in the company include Mérieux Equity Partners and investment holding Eximium.

The sale, which comes at the end of a five-year holding period, is expected to generate returns of 1.8x for Eurazeo, with the potential to score up to 2x with an earnout provision.

The deal values Seqens in the EUR 1.5bn-2bn region.

Eurazeo's Nov Santé Actions Non Cotées, a fund launched in partnership with the French Insurance Federation (FFA) and Caisse des Dépôts, will also invest.

Bpifrance is exploring the option of co-investing alongside SK Capital, according to a statement. The deal is expected to close by the end of 2021.

SK Capital's investment in the company could facilitate a merger with its existing portfolio company Wavelength, combining the two companies' industrial, technology and product capabilities and resources, according to a statement.

US-headquartered SK Capital is currently deploying equity via SK Capital Partners V which held a final close in February 2019 on USD 1.4bn. The GP's recent investments include the carve-out of the automotive and construction pigments unit of Switzerland-based chemicals company Clariant, which saw the GP invest alongside chemicals company Heubach.

Since 2016, the company has invested more than EUR 400m in the development of its manufacturing sites, as well as in the acquisitions of PCAS in France, Finland and Canada; Chemoxy in the United Kingdom; and PCI Synthesis in the United States.

Reuters reported in February 2021 that Seqens was to be put up for sale, with JP Morgan mandated to run the process. The report said that the company could be valued at more than EUR 2bn.

Previous funding
Bain Capital acquired Seqens (then known as Novacap) in November 2002 in a EUR 150m carve-out, acquiring Rhodia's European commercial and industrial activities division.

Ardian acquired a 96% stake in Seqens in an SBO from Bain in January 2011, deploying equity via AXA LBO Fund IV. Seqens was valued at EUR 240m at the time, according to Unquote Data.
In May 2016, Ardian sold its majority stake in Seqens in a deal that valued the company at EUR 654m, retaining a minority stake of 18% and investing EUR 27m via its 2016-vintage Ardian LBO Fund VI, according to Unquote Data.

The deal saw Eurazeo acquire a 67% stake in Sequens, investing EUR 160m in equity via Eurazeo Capital III, which held a final close in December 2016 on EUR 2bn. Mérieux Equity Partners took a 9% stake in Seqens through Mérieux Participations II, while Seqens' management held a 6% stake.

According to Unquote sister publication Debtwire, BNP Paribas, ING and Société Générale arranged a EUR 435m debt package to support the deal.

Company
Formed as an independent entity in 2003, Seqens is a chemical raw materials producer specialising in the pharmaceuticals and speciality ingredients sectors. Seqens produces small molecules and consumer health active pharmaceutical ingredients (APIs), as well as drug delivery excipients and medical material. Its specialty ingredients business includes minerals, solvents, electronics, cosmetics and customer manufacturing.

The company generates revenues of EUR 1bn, versus EUR 666.7m in 2014. The company posts EBITDA of approximately EUR 150m, versus EUR 71.1m in 2014. Seqens has 19 manufacturing sites and seven research and development centres, employing 3,000 staff. It is headquartered in Écully.

People
Seqens – Pierre Luzeau (president).
Eurazeo – Marc Frappier (member of the executive board; managing partner, mid-large buyout); Wilfried Piskula (managing director, mid-large buyout).
SK Capital – Aaron Davenport (managing director).
Ardian – Dominique Senequier (founder, president).

Advisers
Vendor – Rothschild (M&A); JP Morgan (M&A).

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• Topics
• Buyouts
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• Eurazeo
• Ardian (formerly Axa PE)