Clayton, Dubilier & Rice LLC agreed to acquire a 42.5 percent stake in Univar NV in a transaction that values the distributor of commodity and specialty chemicals at about $4.2 billion. CVC Capital Partners Ltd. plans to hold onto a 42.5 percent stake in the business. Univar’s management and other existing investors will own the remaining interest.
Clayton, Dubilier & Rice, LLC and CVC Capital Partners today announced a definitive agreement for CD&R to acquire a 42.5% ownership interest in Univar, a leading global distributor of commodity and specialty chemicals to a broad array of end markets. The transaction values the company at approximately $4.2 billion. Funds advised by CVC will retain a 42.5% stake in the business. The remaining equity will be held by Univar management and other existing investors.
With revenues of $7.2 billion, Univar is a market-leading distribution platform serving highly fragmented and diverse markets and customers. The company operates a network of 179 distribution facilities and distributes more than 11,000 products and 110,000 SKUs to over 80,000 customers in more than 100 countries. Univar has the #1 market position in the U.S. and Canada and the #2 position in Europe.
“Univar’s business profile fits our investment focus perfectly, and we look forward to working with CVC and the Univar management team to continue to build the business,” said David H. Wasserman, a CD&R partner. “The company is a clear market leader in an industry with favorable secular trends, broad spread of risk, significant operational improvement runway and attractive geographic expansion opportunities.”
“Over the last several months, there has been significant interest in Univar and its growth prospects from private equity investors,” said Chris Stadler, managing partner, CVC Capital Partners. “We focused on those investors which would bring significant industry experience and alignment with CVC in the partnership approach with management.”
Gijs Vuursteen, CVC managing director, commented: “Our new partners at CD&R have a deep understanding of the sector and are very well placed to help us in our continued efforts to support the growth of the company and the management team’s strategic and operational initiatives. We continue to be enthusiastic about Univar’s business and future growth and believe that this is the right partnership to advance the company.”
Concurrent with this announcement, Univar has postponed its initial public offering of shares of its common stock and intends to withdraw the registration statement, filed in June 2010, with the U.S. Securities and Exchange Commission for its proposed IPO.
CD&R partner, George K. Jaquette, added: “We have been very impressed with John Zillmer and his team, and look forward to working with them to build long-term value in the years ahead.”
John Zillmer will remain Univar’s President and Chief Executive Officer. CD&R operating partner, William S. Stavropoulos, former chairman and chief executive officer of The Dow Chemical Company, will become the non-executive Chairman of Univar.
In recent years, Univar has benefitted from the growing shift to third-party distribution in the chemical industry. The trend is driven by a combination of factors including globalization, chemical producers continuing to streamline operations through outsourcing, and the ability of scale distributors, like Univar, to offer customers value-added services and a cost-effective channel to market.
“CD&R is widely respected as a business builder with a deep understanding of our industry and distribution business models,” said Mr. Zillmer. “We welcome CD&R’s involvement and CVC’s continued commitment to our growth, success and long-term value creation.”
The transaction is expected to close in the fourth quarter of 2010.
Sullivan & Cromwell LLP and Kirkland & Ellis LLP were legal advisors for CVC and Debevoise & Plimpton LLP advised CD&R.
About Clayton, Dubilier & Rice, LLC
Founded in 1978, Clayton, Dubilier & Rice, LLC is a private equity firm with an investment strategy predicated on producing superior financial returns through building stronger, more profitable businesses. The Firm’s professionals include a combination of financial and operating executives. Since inception, CD&R has managed the investment of more than $12 billion in 46 U.S. and European businesses representing a broad range of industries with an aggregate transaction value of approximately $70 billion. CD&R has a long history of investing in market-leading distribution businesses, including VWR International, a leading global distributor of laboratory supplies, U.S. Foodservice, the second largest broadline foodservice distributor in the United States, Rexel, the leading distributor worldwide of electrical supplies, and Diversey, a leading global manufacturer and distributor of commercial cleaning, sanitation and hygiene solutions. CD&R recently announced an agreement to acquire HGI Holdings, a leading distributor of disposable medical products to chronic disease patients. The Firm has offices in New York and London. For more information, please visit www.cdr-inc.com.
About CVC Capital Partners
CVC is one of the world’s leading private equity and investment advisory firms. Founded in 1981, CVC has a network of 20 offices and over 230 employees throughout Europe, Asia and the United States.
CVC Funds, raised from pension funds, financial institutions and various other partners, seek to identify attractive investments and then develop sustainable, long-term value in close partnership with management teams. To date, CVC has raised over US$44 billion from a diverse and loyal investor base, completing in total over 280 investments in a wide range of industries and countries. Currently CVC manages over US$38 billion and is investing from CVC Tandem Fund, CVC Fund V and CVC Asia III, with an aggregate of US$12 billion in available equity capital.
Today, CVC Funds own 51 companies worldwide, employing over 395,000 people in numerous countries. Together, CVC portfolio companies have combined annual sales of over $96 billion.
CVC believes that the effective ownership and management of a company creates benefits for all stakeholders, from employees to customers, suppliers to shareholders, and the wider community at large. CVC actively encourages its portfolio companies to respect all stakeholder groups and to be responsible corporate citizens. For more information, visit www.cvc.com.
Univar is one of the world’s leading distributors of industrial and specialty chemicals. Univar represents over 2,500 chemical producers and provides its customer base, made up of 80,000 customers, with a full portfolio of products. Univar operates a network of 179 facilities in North America, Europe, the Asia-Pacific region, and Latin America, with additional sales offices located in Eastern Europe, the Middle East, and Africa. In 2009, Univar reported sales of $7.2 billion. For more information, visit: http://www.univar.com.
SOURCE Clayton, Dubilier & Rice, LLC