Charterhouse Selling Lucite for $1.6 Billion

Charterhouse Capital has agreed to sell Lucite International to Mitsubishi Rayon Co. for approximately $1.6 billion in cash. Lucite is a UK-based chemicals company that focuses on the manufacturing of methyl methacrylate. It is being advised by Deutsche Bank and Merrill Lynch.


The Board of Lucite International Group Limited (“Lucite” or the “Company”), has announced that the Company is to be acquired by Mitsubishi Rayon Co., Ltd. (“Mitsubishi Rayon”) for a total cash consideration of approximately $1.6 billion. The acquisition, which is subject to approval by the relevant regulatory authorities, is expected to be completed by the end of January 2009.


Lucite is the world’s leading manufacturer of methyl methacrylate (MMA) and owner of the globally renowned LuciteTM and Perspex brandsTM. The Company was formed from an amalgamation of the acrylics businesses of ICI and DuPont in 1993 and has been majority owned by the private equity investor, Charterhouse Capital Partners LLP, since 1999. Lucite owns the new low cost and proprietary MMA production route, known as Alpha technology. The Company has invested in the development of this new technology, which fundamentally changes the economics of MMA manufacturing, and the first Alpha plant has begun to manufacture MMA in Singapore in the last few days and will be fully operational by the end of this year.


The acquisition will make Mitsubishi Rayon the global leader in this market and confirms its position as the leading acrylics manufacturer in the fast growing Asian markets. The acquisition will lift Mitsubishi Rayon’s annual sales to approximately Yen600 billion, putting it well on the way towards achieving its target of Yen1 trillion annual sales. In the year ended 31 December 2007, Lucite generated revenues of GBP849 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of GBP114 million.


Commenting on today’s announcement, Ian Lambert, Chief Executive of Lucite, said:


“The Board of Lucite International welcomes the acquisition of the Group by Mitsubishi Rayon today. We believe the new combined enterprise will create an opportunity for significant cross learning, productivity and efficiency gains that will benefit our customers and stakeholders. We look forward to working with Mitsubishi Rayon to realise the full potential from the combination of our two companies.


“We would also like to take this opportunity to recognise the support of Charterhouse Capital Partners who have enabled the group to sustain the highest standards of safe operation and to grow by, for example, investing in new facilities in China and the development of our revolutionary Alpha technology including the latest investment in Singapore.


Masanao Kambara, President of Mitsubishi Rayon, added:


“The acquisition of Lucite will give us an unprecedented range of production technologies in the industry, enabling us to adapt more flexibly to raw material trends and better serve our customers. In addition, the two companies’ proprietary technological expertise is also expected to lead to improved cost efficiency, bearing fruit in the form of further growth in the enlarged group’s revenues and earnings. We are delighted to have concluded our agreement with the Board of Lucite and welcome them to the Mitsubishi Rayon group.”


Lucite was advised by Deutsche Bank and Merrill Lynch and Mitsubishi Rayon by Credit Suisse Group and Mitsubishi UFJ Securities.