CVC acquires Paroc for €700m

The GP paid approximately 9.1x EBITDA for Paroc, which achieved EBITDA of around €77m last year. CVC closed the deal quickly, having held exclusive talks with the business for less than two weeks.

The deal was facilitated through a structured process that began in August, with Nordic Capital, TPG, BC Partners and Cinven submitting bids of €700-750m.

Prior to the deal, the group had been owned by its debtors, which acquired an 87.5% stake in the company in 2010 while employees retained the remaining 12.5%, according to unquote" data.

Previous funding
Paroc has a long history of private equity ownership, beginning in 1999 when IK Investment Partners (then Industri Kapital) carved out Paroc from Partek Corporation for around FIM 150m (€25m).

IK divested the company in 2003 when it sold the business to BA Capital Partners and Accent Equity for €250m.

The two exited just three years later, handing off Paroc to Arcapita for an enterprise value of €620m. Nordic Mezzanine, ING Group and Morgan Stanley financed the deal, though Nordic Mezzanine sold its stake in the deal during a recapitalisation in 2007.

Arcapita lost its stake in Paroc in 2010 following a debt-for-equity swap, in which lenders wrote down the group's €750m debt pile to around €350m, in return for an 87.5% stake.

Company
Founded in 1943, the Helsinki-based company produces stone wool insulation materials for residential and commercial construction, and industrial applications.

Paroc had revenues of €433m and an EBITDA of €77m in 2013, up from 2009 levels of €317m and €46m respectively.

The group employs 2,100 people across nine factories in Finland, Sweden, Lithuania, Poland and Russia.

People
CVC partners Peter Törnquist and Søren Vestergaard-Poulsen led the deal for the GP. Kari Lehtinen is the CEO of Paroc.

Advisers
Equity – Deutsche Bank (M&A); Merasco (Corporate finance); Freshfields Bruckhaus Deringer (Legal); Avance (Legal); BCG (Commercial due diligence), Golder (Environmental due diligence); Aon (Insurance due diligence).
Company – Lazard & Co (M&A); Macfarlanes (Legal); Borenius (Legal); KPMG (Corporate finance).
Management – PCA Corporate Finance (Corporate finance); Eversheds (Legal).

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• Buyouts
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