Charterhouse bags $1.6bn for Lucite

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Charterhouse Capital bucked the trend in November with its sale of Lucite International Group Ltd to Mitsubishi Rayon Co, its major Japanese competitor. The deal is expected to be completed by the end of January 2009, and will make Mitsubishi the global leader in acrylics manufacturing and lift its annual sales to approximately Yen600bn.

Prior to the sale, Charterhouse held an 81.6% stake in the business, petrochemical company Ineos Investors held 11.5% and the remainder was in private ownership.

Lucite, a manufacturer of methyl methacrylate (MMA) and owner of the globally renowned Lucite and Perspex brands, was formed through merging the acrylics businesses ICI (Imperial Chemical Industries), and US company E.I. du Pont de Nemours, in 1993.

Charterhouse invested £560m in the business in 1999. In the year ending December 2007, Lucite had revenues of £849m and EBITDA of £114m. (Page 31)

Since Q4 2007, trade sales have continuously gone down in volume and value - with the exception of the Somerfield sale by Apax Partners and Barclays private equity in July 2008, which accounts for £1.56bn (see chart 1). Interestingly, and despite a lack of leverage, secondary buyouts have gone down much slower than widely assumed. Here the sale of FoodVest Group, from CapVest to Lion Capital in July 2008, worth £1.1bn, is the exception to the downward trend in value (see chart 2).