Platinum Equity-backed Solenis to acquire Diversey for $4.6 billion; semiconductor deal round-up

Good morning dealmakers, thank goodness it’s Friday!

It’s Obey Martin Manayiti here with the Wire. We have a big deal to highlight below from Platinum Equity’s portfolio company Solenis, but first, and as our norm, we are capping the week with a deal trend that caught my attention.

Today we are teeing off on the semiconductor theme, a sector that has generated a lot of interest from policymakers and investors in the past few months. We are zeroing in on four deals in aerospace and defense. We also continue our profile on women in private equity, today highlighting Veena Isaac, partner and co-head of equity secondaries at Apollo Global Management.

But first, let’s look at this morning’s deal news.

Kill the gems:
Platinum Equity-backed Solenis has entered a definitive merger agreement with Nasdaq-listed and Bain Capital-backed Diversey to acquire the latter firm at an enterprise value of around $4.6 billion.

Diversey is a provider of hygiene, infection prevention and cleaning products based in Fort Mill, South Carolina.

Bain Capital will contribute around 56 percent of its existing equity into Solenis at an implied value per Diversey share of $7.84 and will sell its remaining shares to Solenis for cash at the same price, according to a press release.

Other shareholders will receive $8.40 in cash, a premium of around 41 percent over Diversey’s closing share price on March 7, the last trading day before the deal announcement, and 59 percent over its 90-day volume-weighted average price.

Chips ahoy:
A shortage of microchips and related technologies, exacerbated by the pandemic and a snarled supply chain, has opened a global race for the semiconductor industry. Microchips are at the center of electronic advancements, cutting across sectors such as automobiles, household appliances, cellphones, medical, manufacturing equipment, aerospace and defense systems, and many more.

The US government enacted a multi-billion-dollar CHIPS and Science Act to spur research and production of semiconductors. Recently, PE Hub noted a few deals that show the appetite of private equity firms to invest in this sector, all focusing on the aerospace and defense industries.

San Diego-headquartered AEM, a portfolio company of Industrial Growth Partners, last month acquired Central Semiconductor, a Long Island, New York-based company that designs and manufactures semiconductors for a range of end-markets, including industrial, medical, aerospace, defense and commercial. Central Semiconductor was founded in 1974.

Rick Busch, AEM CEO, said the combination of these two companies will go a long way in deepening the broader product offering. “The acquisition of Central Semiconductor provides AEM with a full suite of discrete power-conditioning components, which we view as highly complementary with AEM’s existing portfolio of circuit-protection products,” he said.

Artemis Capital Partners, a Boston-based PE firm, completed the sale of KCB Solutions, a manufacturer of specialty high-reliability RF and microwave technologies, to Micross Components, a portfolio company of Behrman Capital.

Among its products, KCB boasts of Gallium nitride transistors, a wide bandgap semiconductor used for high-efficiency power transistors and integrated circuits, and power amplifiers, low-noise amplifiers, Hi power pin switches, GaAs Fet Switches and Digital Step Attenuator, among others.

“KCB’s components serve the intersection of two of the most demanding and essential end-markets, defense and space,” said Peter Hunter, Artemis managing director and former KCB board member.

Women in PE:
Goal-getter: Next up in our coverage celebrating women in private equity this month, today I highlight Veena Isaac, partner and co-head of equity secondaries at Apollo, who is part of the Women in PE Class of 2023 that we featured this year.

She learned over a 20-year career in finance that not every day will be perfect. The key is to not let it get you down, she told Buyouts editor Chris Witkowsky. That goes for life outside of work too. Isaac is mother to three boys: 10-year-old twins and a three-year-old. “Having our families help and sharing responsibilities has been really critical for us,” she says. “I won’t be able to go to every event, and that’s ok, when I am home, I try to just be more focused on the time I have with the kids.”

That sense of balance has taken Isaac through her career, in which she and two colleagues now co-lead Apollo’s foray into GP and LP secondaries and hybrid services, which the firm is calling S3. Formed last year, S3 launched with $4 billion in capital, including a multi-billion-dollar commitment from Abu Dhabi’s sovereign fund.

Her career started at Goldman Sachs, later joining a team in investment management doing secondaries. This was in 2003, at an early moment in the evolution of secondaries.

“I kind of fell into it,” she said. “I liked the velocity of deal flow, the diversity of deal types, the emphasis on purchase price and finding situations with structural alpha.” From there she went to business school at Stanford. Isaac was born in India and spent much of her childhood in Saudi Arabia before attending boarding school in the US.

Isaac then joined Pantheon in New York, helping to build out the London firm’s presence on the East Coast. It was at Pantheon that Isaac realized she thrived in an entrepreneurial environment where “the business-building component and the investing component go hand in hand,” she says.

After a couple years at Jasper Ridge Partners, she joined BlackRock and helped raise a $3 billion secondaries fund in 2021. She joined Apollo last year.

That’s all from me – have a nice weekend and MK will be back with you on Monday.