Platinum Equity-backed Solenis entered into a definitive agreement to acquire Bain Capital-backed US-based specialty chemicals company Diversey at an enterprise value of around $4.6 billion. The deal would return Diversey to private hands just two years after its public listing.
WHO: For 95 years, the Diversey brand has become synonymous with product quality, service, and innovation, delivering hygiene, infection prevention, and cleaning solutions.Their fully integrated suite of products combines patented chemicals, dosing and dispensing equipment, cleaning machines, services, and digital analysis. The company serves more than 85,000 customers in over 80 countries with a network of approximately 8,600 employees globally.
Solenis is a leading global producer of specialty chemicals focused on delivering sustainable solutions for water-intensive industries, including the pulp, packaging paper and board, tissue and towel, oil and gas, petroleum refining, chemical processing, mineral processing, biorefining, power, municipal, and pool and spa markets. The company’s product portfolio includes a broad array of water treatment chemistries, process aids and functional additives, as well as state-of-the-art monitoring and control systems. Headquartered in Wilmington, Delaware, the company has 49 manufacturing facilities strategically located around the globe and employs over 6,500 professionals in 130 countries across six continents.
IN THEIR OWN WORDS: “The merger presents a unique opportunity to enhance value and create a more diversified business with increased scale, broader global reach, and superior customer service capabilities. It will enable the combined company to grow and provide a number of attractive cross-selling opportunities, including meeting increasing customer demand for water management, cleaning and hygiene solutions,” said Phil Wieland, CEO of Diversey.
“This is a strategic combination of two leading global products, services, and technologies providers with proven track records of product innovation who offer truly differentiated solutions to customers,” said John Panichella, Solenis CEO. “In combining these two complementary businesses, we expect to usher in a new and exciting chapter in our long history of helping customers tackle core challenges such as water and energy management, partnering on sustainability issues to work towards a cleaner, safer world, and reducing environmental impacts. With continued support from Platinum Equity and now Bain Capital, we are confident that we’ll maximize the opportunities ahead.”
- Specialty chemicals company Solenis has agreed to acquire Diversey in an all-cash transaction valued at an enterprise value of approximately $4.6 billion. Upon completion of the merger, Diversey will become a private company.
- Solenis CEO John Panichella will lead the combined company following the transition and integration.
- In November, Diversey projected to end the year with adjusted pretax earnings of about $330 million for 2022 and a mid-single-digit revenue gain from 2021’s $2.62 billion.
- Under the terms of the agreement, Diversey shareholders (other than shareholders affiliated with Bain Capital Private Equity) will receive $8.40 per share in cash, which represents a premium of approximately 41.0% over Diversey’s closing share price on March 7, 2023, the last full trading day prior to the transaction announcement, and a premium of approximately 59.0% over Diversey’s 90-day volume-weighted average price (VWAP). Bain Capital will receive $7.84 per share in cash and will roll over a portion of its shares of Diversey into an affiliate of Solenis in exchange for common and preferred units of such affiliate.
- The purchase price is well below Diversey’s IPO price of $15 a share in March 2021.
- In 2017, Bain Capital acquired Diversey from Sealed Air Corp. for $3.2 billion, taking the business public in 2021 and retaining a roughly 73% stake.
- Under Bain Capital’s ownership, Diversey completed several add-on acquisitions. In 2018, the company purchased Zenith Hygiene Group PLC, a UK and Ireland cleaning and hygiene products maker. In 2020, Diversey acquired wet-wipes maker Wypetech LLC for $32.3 million and hygiene products company SaneChem in Poland for $21.8 million, according to a securities filing and data provider S&P Global Market Intelligence. Last year, Diversey’s acquisitions included UK-based janitorial-products company Shorrock Trichem Ltd. for about $41.4 million, according to S&P.
- Platinum Equity acquired Solenis from Clayton Dubilier & Rice and BASF SE in 2021, merging it with portfolio company Sigura Water for a total combined transaction value of about $6.5 billion.
- Evercore is serving as financial advisor to the Special Committee, and Wachtell, Lipton, Rosen & Katz is serving as the Special Committee’s legal counsel.
- J.P. Morgan Securities LLC and Centerview Partners LLC are serving as financial advisors to Diversey on the transaction. Kirkland & Ellis LLP is providing legal counsel to Bain Capital and Diversey.
- BofA Securities, Goldman Sachs, and Piper Sandler are serving as financial advisors to Solenis on the transaction. Gibson, Dunn & Crutcher LLP is providing legal counsel and Willkie Farr & Gallagher LLP is providing debt financing counsel to Platinum Equity and Solenis. BofA Securities and Goldman Sachs are leading the debt financing for the acquisition.