3i Group PLC and other shareholders signed a contract to sell Panreac To Illinois Tool Works Inc. Panreac is a Spanish manufacturer and supplier of chemicals. The transaction will provide 3i more than a 2x return on its investment. In 2005, 3i invested about €25 million for a 75 percent stake in Panreac.
3i, funds managed by 3i, and other shareholders have signed an agreement to sell Panreac, a leading Spanish manufacturer and supplier of quality chemicals for laboratory research and production, to Illinois Tool Works Inc. (“ITW”), a company specialising in the worldwide production and design of high-tech gears and components, equipment and consumer systems, based in the US. The successful sale of Panreac sees 3i make in excess of a 2x return on its investment.
3i, which invested approximately €25 million for a 75% stake in Panreac in 2005, has supported the business during the past five years in consolidating its leadership position in the Spanish market as well as pursuing its international expansion plan which was focused on increasing exports.
Headquartered in Castellar del Vallès (Barcelona,) Panreac has experienced steady growth over the past five years, despite Spain’s challenging economic backdrop. With 230 employees, Panreac has positioned itself as a leading manufacturer of reagents used in research and pure chemical agents in Spain.
The company’s portfolio currently comprises 12,000 products, including ACS compliant reagents, high-purity solvents for HPLC (High Performance Liquids Chromatography), fine chemicals, food chemicals, growth media used in microbiology, and histology products. These products are sold into a variety of industries, including pharmaceuticals, hospitals and universities, food and chemicals.
During the five years that 3i was invested in Panreac, the company expanded further in its Spanish home market as well as entered into a number of other markets. In 2008, Panreac acquired Italy’s Nova Chimica, which consolidated the company’s leading position in Italy. The company continues to look for similar acquisition opportunities throughout Europe. Furthermore, Panreac has recently experienced an increase in sales to North Africa and the Middle East.
Óscar Gómez, a director at 3i, stated: “During our five year investment, Panreac and its management team demonstrated a great ability to steadily grow sales and earnings, against an extremely challenging economic backdrop. The business is an excellent example of value creation combining a number of elements: strengthening the management team; growth through acquisitions; cash flow generation; and improving productivity. ITW is the ideal partner for the next stage of Panreac’s expansion.”
With a history that dates back nearly 90 years, ITW is one of the leading industrial conglomerates in the United States. With a highly diversified portfolio of activities, it is focused on creating value-added products for key customers across the world through its 800 decentralised business units, which are located in 57 countries and employ close to 69,000 workers.
The Polymers & Fluids division that Panreac will be joining consists of several companies, including the Spanish companies Krafft and Quimsa y Lebo, specializing in the manufacture and sale of chemical products for the automotive, construction and industrial sectors; Wynn’s (Belgium) a manufacturer of additives; and the British companies Plexus and Devcon, manufacturers of structural adhesives, among 60 others companies worldwide.
Agustín Ruiz de Munain, president of the Polymers & Fluids division, commented: “ITW sees this acquisition as a strategic way of entering the fine chemicals sector in Europe. Panreac and its management team will serve as the launching pad for this project.”
Joan Roget, managing director of Panreac, added: “Having a shareholder such as ITW will help us retain our leadership position in Spain whilst continuing to pursue high levels of growth in other markets. It is also the ideal partner for initiating the consolidation of this sector, which will enable us to provide a wider coverage and better service to our customers. We look forward to the period of growth that lies ahead of us. We also wish to express our appreciation to 3i for the support received during these last five years of successful growth.”
For further information, please contact:
Laurie Yeh, 3i PR team Tel: 020 7975 3126
3i is an international investor focused on buyouts, growth capital and infrastructure, investing in Europe, Asia and North America. Our competitive advantage comes from our international network and the strength and breadth of our business relationships. These underpin the value that we deliver to our portfolio, shareholders and fund investors. www.3i.com
Panreac is a manufacturer of reagents for laboratory analysis and chemical products for industrial use by the pharmaceutical, foodstuff, chemical and research and development sectors, hospitals and universities.
With $13.9 billion in 2009 revenues, ITW is a multi-national manufacturer of a diversified range of value-adding and short-lead time industrial products and equipment. The Company consists of nearly 800 business units in 57 countries and employs approximately 59,000 people.