Bloomberg News

Koch, Goldman Agree to Buy Printing-Ink Maker Flint From CVC (1)

April 10, 2014

Koch Industries Inc. and Goldman Sachs Group Inc.’s (GS:US) private-equity unit agreed to buy Flint Group from CVC Capital Partners Ltd. to add chemicals and additives used in the printing and packaging industries.

The transaction, which adds 137 sites, is expected to be completed in the second half, the companies said today in a statement, without giving financial terms. Flint, based in Luxembourg, generates annual sales of about 2.2 billion euros ($3 billion). The asset fetched just over 2 billion euros, according to people with knowledge of the situation who declined to be identified.

The decision by Koch and Goldman Sachs to invest in the business coincides with growing demand for packaging and increased demand for newspapers in emerging markets. Flint, along with DuPont Co. (DD:US) and MacDermid Group Inc., have been gaining ground with flexographic printing plate technology for packaging.

“Flint is uniquely positioned to capture growth in its attractive printed packaging markets while at the same time continuing to benefit from strong and resilient performance of its print media business,” said Matthias Hieber, head of corporate equity investing for German-speaking operations at Goldman Sachs Merchant Banking Division, in the statement. “With a significantly improved capital structure, Flint is best positioned to pursue its ambitious growth plans.”

The sale marks the end of a years-long attempt by CVC to exit Flint which became a market leader in the printing and packaging additive industry via acquisitions. CVC shelved an initial public offering in 2010 and abandoned another exit attempt in 2012 after private-equity firms withdrew from a bidding process, people close to the talks said at the time.

Greenhill & Co. advised CVC and Flint in the transaction with Koch and Goldman Sachs.

New Management

CVC built the asset from two European ink companies bought in 2004 from BASF SE and Akzo Nobel NV (AKZA) and merged with Flint Ink Corp. in the U.S. a year later to form the enlarged group. The private equity company installed new management, appointing Akzo Nobel executive Antoine Fady as chief executive in 2011, and Steve Dryden as finance head last year from U.K. packaging company DS Smith Plc.

For Koch, the purchase ties in with its ownership of Georgia-Pacific LLC, which brings insight into the needs of packaging makers. Koch, led by billionaire brothers Charles and David Koch, is one of the largest closely held companies in the U.S., with interests ranging from energy to fertilizers.

To contact the reporter on this story: Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net

To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net Andrew Noel, David Risser


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