Solenis acquired in $ 5.25 billion private equity merger deal
WILMINGTON – Solenis, the global producer of specialty chemicals used in water-intensive industries, was sold on Tuesday in a $ 5.25 billion deal between private equity funds.
Platinum Equity, a California-based private equity firm that focuses on leveraged buyouts, has struck the deal with the owners of Solenis, the New York-based private equity firm Clayton, Dubilier & Rice (CD&R) and the German chemical company BASF. Before the announcement of the agreement, reports had filtered that Solenis-owned companies were also considering going public after seven years of private control.
Solenis was born out of the former Hercules and Ashland water treatment divisions dating back to 1907, launching its current iteration in 2015. The company, which opened a new headquarters at Avenue North near US Route 202 last year, has a global presence spanning 120 countries, five continents, 41 manufacturing plants and more than 5,200 employees. It employs several hundred people in Delaware at the corporate headquarters and a rented research and development lab on the Ashland campus near Hercules Road.
CD&R acquired a controlling 51% stake in Solenis from Ashland as part of an agreement reached in July 2014 for a business valuation of $ 1.8 billion. In 2019, Solénis merged with BASF’s Paper & Water Chemicals business, giving the German giant a 49% stake and creating a leading solutions provider for the pulp and paper and water treatment industries. CD&R and BASF will leave Solenis following the acquisition of Platinum Equity.
“We are proud to have supported Solenis’ growth strategy and have enjoyed working alongside the company’s talented team since our initial investment in 2014,” said Stephen Shapiro, CD&R partner, in a statement . “During this period, Solenis considerably extended its global presence, strengthened its customer offerings and established itself as a leader in sustainable development. We are delighted to have found a strong new investment partner for Solenis and look forward to following the continued success of the business.
As part of the transaction, which includes debt, Solenis will merge with Georgia-based Sigura Water, an existing Platinum Equity holding company that the company acquired in 2019, for a combined total value of approximately $ 6.5 billion. dollars. Sigura has six production sites on four continents and 1,000 employees worldwide.
The combined company, which will be led by Solenis CEO John Panichella, is expected to generate approximately $ 3.5 billion in revenue and global customers in the consumer, industrial and processing markets. swimming pool waters. Sigura CEO Robert Baird will lead the new Pool Solutions division at Solenis once the merger is complete.
“The global demand for solutions that save water, use less energy, eliminate waste and convert everyday products into more sustainable materials is only growing,” said Jacob Kotzubei, partner at Platinum Equity, in a statement announcing the agreement. “As a leader in sustainable development, Solenis has been helping clients meet these complex challenges for over 100 years. It is an exceptionally well-managed organization with an exceptional leadership team and a service-oriented culture. We believe in the company’s mission and are delighted to invest in its continued growth and expansion.
Solenis currently serves two main segments: consumer solutions for the food packaging, graphic paper, facial tissues and napkins markets; and industrial solutions for the main water and wastewater treatment markets. Sigura’s business is the production and sale of water maintenance solutions and value-added services for residential and commercial pool and spa applications as well as industrial markets.
“Solenis and Sigura are very complementary companies and a fantastic fit with very little product or customer overlap,” Todd Golditch, Managing Director of Platinum Equity, said in a statement. “They are both leaders in providing critical products and solutions to water intensive industries and serving attractive end markets with strong tailwinds. Sigura’s high-performance pool and spa treatment business and industrial segment will fit seamlessly into Solenis’ portfolio, and both will benefit from greater scale and end-market diversification. Together, the combined Solenis company will also have a world-class management team capable of ensuring market leadership and significant growth in the short and long term.
Golditch added that Solenis could continue to grow as Platinum Equity continues to “seek new opportunities to grow the combined company through additional strategic strategies. [merger and acquisition]. “
The acquisition of Solenis and the merger with Sigura are expected to be finalized before the end of 2021, subject to regulatory approvals and customary closing conditions.