Bloomberg News

Apollo Agrees to Buy Taminco From CVC for 1.1 Billion Euros

December 18, 2011

(Updates with details on Taminco in sixth paragraph.)

Dec. 16 (Bloomberg) -- Apollo Global Management LLC, the private-equity firm started by Leon Black, agreed to buy a Belgian chemical producer from CVC Capital Partners Ltd. for about 1.1 billion euros ($1.4 billion).

The purchase of Taminco Group Holdings is expected to close in the first half of next year, New York-based Apollo said in a statement today. The firm outbid Bain Capital LLC and Pamplona Capital Advisors Ltd. for the company, people with knowledge of the talks said earlier yesterday.

The agreement ends a prolonged exit by CVC from Taminco, which the London-based private-equity firm bought for 800 million euros in 2007. The fund manager canceled an initial public offering in February 2010, citing market volatility, and couldn’t reach a sale agreement with synthetic rubber maker Lanxess AG this year. CVC, which is investing a 10.8 billion- euro European buyout fund, is set to make more than twice its initial investment in the sale, said the people, who declined to be identified because the talks are private.

“Taminco is a superior chemical company with an impressive portfolio of products, strong relationships with its customers, a talented management team, and highly skilled employees,” Scott Kleinman, lead partner of Apollo’s private-equity unit, said in the statement.

Taminco’s Sales Rise

Taminco, based in Ghent, Belgium, takes ammonia and blends it with alcohol to make amines that can be reacted with other chemicals to make derivatives for pharmaceuticals, foods, crop chemicals and solvents. It’s a consolidated market, with BASF SE of Germany as the other major supplier of amine derivatives.

Sales increased to 715 million euros last year from 625 million euros in 2007, while earnings before interest, tax, depreciation and amortization rose to 159 million euros from 110 million euros, CVC said in an e-mailed statement today.

CVC announced yesterday that it has teamed up with Johor Corp. to bid at least $1.6 billion for KFC Holdings (Malaysia) and parent QSR Brands Bhd. in a deal that would hand it control of more than 900 fast-food outlets, including KFC and Pizza Hut, in Southeast Asia and India.

CVC and Taminco were advised by Bank of America Corp., Goldman Sachs Group Inc., Allen & Overy LLP, Ernst & Young LLP, Arthur D Little Inc. and URS Corp., CVC said. Apollo will raise debt financing for the Taminco buyout from banks led by Citigroup Inc., Credit Suisse Group AG, Nomura Holdings Inc. and UBS AG, according to two people with knowledge of the deal.

Buyout firms such as Apollo typically use loans secured on the targets they acquire to finance more than half of the purchase price and cash from their own funds for the rest. The firms seek to improve performance at the companies they acquire or expand them before selling them within about five years.

--With assistance from Patricia Kuo and Andrew Noel in London. Editors: Edward Evans, Steve Bailey

To contact the reporter on this story: Anne-Sylvaine Chassany in Paris at achassany@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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