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CD&R to make 3x its money with $2.3 bln Mauser sale: source

Clayton, Dubilier & Rice may have scrapped plans to take Mauser Group NV public, but the private equity firm stands to more than triple its money.

On Feb. 7 Stone Canyon Industries said it agreed to buy Mauser in a deal valued at $2.3 billion. Stone Canyon, an industrial holding company, owns BWAY, which makes rigid metal and plastic containers.

CD&R filed in August to take Mauser public and was very near to launching the IPO. The New York PE firm acquired Mauser in August 2014 for 1.2 billion euros ($1.28 billion). CD&R invested around $315 million in the deal, a source said. The PE firm owned 89.3 percent of Mauser, according to an SEC filing.

Mauser, of Germany, supplies rigid packaging products and services for more than 7,000 customers, including Dow Chemical and Chevron. The company employs 4,500 people. It’s unclear how much leverage Mauser had before it was sold to CD&R. As of Sept. 30, Mauser had 1.25 billion euros ($1.17 billion) in long-term debt, regulatory filings said. That’s almost as much as what CD&R paid for Mauser back in 2014. The company’s net debt is actually higher now, around $1.4 billion, the source said.

Mauser completed three acquisitions in 2015, paying an aggregate 22.6 million euros, SEC filings said. In December, the company acquired Total Container Group for 49.1 million euros.

Founded in 1978, CD&R is one of the oldest PE firms. It focuses on companies mainly in North America and Europe. The firm in the past year has invested in Drive DeVilbiss Healthcare, a medical-products maker; BUT, a home-equipment retailer in France; and Kalle GmbH, a provider of artificial casings for the meat-processing industry.

CD&R used its ninth fund, which closed on $6.25 billion in 2014, to buy Mauser. The PE firm is fundraising for its 10th fund, which has an $8.5 billion target, Reuters reported in December.

Mauser paid out dividends during its more than two years as a CD&R portfolio company. The company distributed 97.5 million euros in June 2015 and another 87.5 million euros the following October for a total of 185 million euros ($197.7 million), SEC filings said. CD&R owns 89 percent, so that means it received $176.8 million.

Including the roughly $176.8 million of dividends and the $2.3 billion from the sale to Stone Canyon, CD&R stands to more than triple its investment, a source said.

Mauser declined comment.

Action Item: Contact Mauser CEO Hans-Peter Schaefer at +1 941-966-5294

Photo of Mauser plastic drums courtesy of the company