Solenis acquired by private equity firm in $6.5 billion deal that will combine water chemical businesses

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Platinum Equity has agreed to acquire Solenis from Clayton, Dubilier & Rice, and BASF in a $6.5 billion deal.

The deal will combine Solenis with a Platinium business that, among other things, supplies swimming pools chemicals.

As part of the transaction, Solenis is expected to merge with Sigura Water, an existing Platinum Equity portfolio company the firm acquired in 2019, for a total combined transaction value of approximately $6.5 billion.

The combined company is expected to generate approximately $3.5 billion of annual revenue and serve a diverse range of customers worldwide in consumer, industrial, and pool water treatment markets.

Headquartered near Wilmington,  Solenis supplies specialty chemicals and services for process, functional, and water treatment applications to consumer and industrial markets.

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The company’s presence spans 120 countries and five continents and has 5,200 employees and 41 manufacturing sites.

Solenis was formed after Ashland, formerly Hercules, sold water-related operations to Clayton, Dubilier & Rice.

Solenis went on to acquire a BASF business, with the German chemical giant getting a stake in the company.  Solenis has never made a public stock offering,  a common strategy that allows private equity investors to cash out.

“Global demand for solutions that save water, use less energy, eliminate waste, and convert everyday products to more sustainable materials is only continuing to grow,” said Jacob Kotzubei, partner at Platinum Equity. “As a leader in sustainability, Solenis has been helping its customers tackle these complex challenges for more than 100 years. It is an exceptionally well-run organization with an outstanding management team and a service-oriented culture. We believe in the company’s mission, and we are excited to invest in its continued growth and expansion.”

Solenis currently serves two primary segments: Consumer Solutions (consumer and food packaging, graphic paper, tissue, and towel markets) and Industrial Solutions (core water treatment and wastewater markets). Sigura’s business is in the production and sale of water care solutions and value-added services for residential and commercial pool and spa applications and industrial markets.

“Solenis and Sigura are highly complementary businesses and a fantastic fit with very little product or customer overlap,” said Todd Golditch, managing director at Platinum Equity. “They both are leaders in providing mission-critical products and solutions to water-intensive industries and serve attractive end markets with strong tailwinds. Sigura’s high-performance pool and spa treatment business and the industrial segment will slot perfectly into the Solenis portfolio, and both will benefit from increased scale and end-market diversification. Together, the combined Solenis company will also have a world-class management team capable of driving market leadership and significant growth in the near- and long term. We will also continue seeking new opportunities to grow the combined company through additional strategic M&A (mergers and acquisitions).

Solenis CEO John Panichella will continue to lead the combined company following the transition and integration.

“Today is an important milestone for Solenis. We thank the CD&R team for its support, which has positioned us well for this exciting next phase of growth with our new investment partners at Platinum,” said  Panichella. “Combining with Sigura will help bolster our scale, diversify our end markets, and create attractive operational improvement opportunities to increase profitability. Sigura is an industry pioneer in the pool space with a well-deserved reputation for innovation, a portfolio of industry-leading brands in the pool space, and a growing industrial business. We are thrilled to partner with Platinum and excited to welcome Sigura to the Solenis family.”

The acquisition of Solenis and merger with Sigura are expected to be completed before the end of 2021, subject to regulatory approval and closing conditions.

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