SK Capital acquires Clariant’s pigments business in consortium with Heubach

Langels­heim (Germany)/New York — Swiss specialty chemi­cals group Clari­ant has announ­ced that it will sell its pigments busi­ness to a consor­tium consis­ting of the Heubach Group and SK Capi­tal Part­ners. The tran­sac­tion is valued at $900 million. The purchase price repres­ents a multi­ple of 10.7 to 11.4 times stan­da­lone 12-month adjus­ted EBITDA as of April 2021. Clari­ant intends to reinvest at the time of closing to become a 20 percent share­hol­der in the ulti­mate holding company along­side Heubach and SK Capital.

The combi­ned company will gene­rate annual sales of more than 900 million euros with around 3,000 employees. Through the reinvest­ment, Clari­ant intends to further bene­fit from the impro­ved profi­ta­bi­lity of the pigments busi­ness. An effi­ci­ency program alre­ady initia­ted and syner­gies from the merger with the Heubach pigments busi­ness should also contri­bute to this.

Clariant’s pigments busi­ness is valued at an enter­prise value of CHF 805 million to CHF 855 million, subject to an earn-out payment of CHF 50 million linked to the finan­cial results of the pigments busi­ness in 2021. With the closing of the tran­sac­tion, Clari­ant has comple­ted the inten­ded dive­st­ments as part of the port­fo­lio stream­li­ning, follo­wing the previous dive­st­ments of the Health­care Pack­a­ging and Master­bat­ches businesses.

Kirk­land & Ellis advi­sed SK Capi­tal Part­ners on the forma­tion of a consor­tium with Heubach Group and the consortium’s subse­quent acqui­si­tion of Clariant’s pigments business.

The tran­sac­tion is expec­ted to close in the first half of 2022, subject to regu­la­tory appr­ovals. At the closing of the tran­sac­tion, Clari­ant will take a 20% stake in the combi­ned business.

About SK Capital

SK Capi­tal is a private invest­ment company focu­sing on the specialty mate­ri­als, chemi­cals and phar­maceu­ti­cal sectors. The company curr­ently mana­ges assets in excess of USD 5 billion.

The Heubach Group is a leading global manu­fac­tu­rer of orga­nic, inor­ga­nic and anti­cor­ro­sive pigments and pigment prepa­ra­ti­ons. The company is head­quar­te­red in Langels­heim and opera­tes sites in Germany, the USA and India, as well as sales offices worldwide.

Advi­sors to SK Capi­tal Part­ners: Kirk­land & Ellis, Munich
Attila Oldag, Dr. Chris­toph Jerger (both lead, both M&A, Private Equity), Daniel Hiemer (Tax); Asso­ciate: Dr. Johan­nes Rowold (M&A, Private Equity)
Kirk­land & Ellis, London: David Holds­worth (Lead), Rachel Green­halgh (both M&A, Private Equity), Kirs­teen Nicol (Debt Finance), Shane Cran­ley (Anti­trust & Compe­ti­tion), Timo­thy Lowe, Cian O’Con­nor (both Tax); Asso­cia­tes: Amelia Rolfe, Louis Hopson (both M&A, Private Equity), Stefan Arnold-Soulby, Maurice Walsh (both Debt Finance), Phil­ipp Gnatzy, Sandeep Ravi­kumar (both Anti­trust & Competition).
Kirk­land & Ellis, Brussels: Dr. Thomas S. Wilson (Anti­trust & Competition)
Kirk­land & Ellis, USA: John S. Kefer (New York), Thomas James Doble­man, Joce­lyn A. Hirsch (both Chicago, all Debt Finance); Asso­cia­tes: Bridget E. Hahn (New York, Debt Finance), Joshua P. Cowin (Chicago, M&A, Private Equity)

About Kirk­land & Ellis
With appro­xi­m­ately 2,900 lawy­ers in 16 offices world­wide, Kirk­land & Ellis is one of the leading inter­na­tio­nal commer­cial law firms. The Munich team provi­des focu­sed advice in the areas of private equity, M&A, corpo­rate, capi­tal markets, restruc­tu­ring, finan­cing and tax law.