Lonza to sell Specialty Ingredients business
Following a long period of speculation, Lonza has entered into a definitive agreement to sell its Lonza Specialty Ingredients (LSI) business to private equity firms Bain Capital and Cinven for CHF 4.2 billion in order to focus entirely on healthcare. The deal is expected to close in 2H, subject to customary closing conditions.
Basel-headquartered LSI, most of which was formerly Arch Chemicals, turns over about CHF 820 million/year. It has 17 manufacturing sites, 11 R&D centres and some 2,800 employees. As well as microbial control for disinfectants, preservatives, sanitisers and personal care products, it offers custom development and manufacturing of speciality chemicals and composites for the electronics, aerospace, food and agrochemical industries.
The acquiring consortium, which was advised by Trumont, said that LSI provides a range of differentiated specialty chemical products, is in a market with strong structural growth and a diversified set of attractive end-markets. Its strategy is to:
* Enhance the R&D capabilities of LSI to continue to develop new chemistries to control microbes
* Build deeper customer relationships through customised application development
* Consolidate the fragmented microbial control market through buy-and-build opportunities; and
* Invest further in the facility at Visp
“Both Bain Capital and Cinven have strong experience in the industrials sector and an established track record of successful investments in portfolio companies,” Lonza commented. The former currently owns Diversey and Italmatch, and previously Brenntag and Trinseo; Cinven owns distributor Barentz and construction chemicals firm Chryso. It previously owned CeramTec and Kloeckner Pentaplast.
After evaluating other options, Lonza announced in July 2020 that it intended to sell LSI. Lanxess and Clariant were both linked to it as potential buyers, alongside such other private equity firms as Advent, Carlyle and the Swiss Partners Group.