Solenis sale creates water treatment giant

As rumoured last month, BASF and private equity investor Clayton, Dubilier & Rice (CD&R) have exited their joint ownership of paper and water treatment chemicals company Solenis, by selling it to Platinum Equity. Solenis will be merged with Platinum’s existing subsidiary Sigura, creating a player in water treatment with $3.5 billion/year in sales.

The transaction implies an enterprise value of $5.25 billion for Solenis, including net debt, while the merger gives a combined transaction value of about $6.5 billion. Both should be completed by the end of 2021, subject to regulatory approval and customary closing conditions.

Delaware-based Solenis is active across 120 countries in five continents, with over 5,200 employees and 41 manufacturing facilities. CD&R acquired it from Ashland in 2014. It was merged with BASF’s paper-wet-end and water-chemicals business in a 51-49 joint venture in 2019, the same year that Platinum acquired Sigura.

Platinum managing director Todd Golditch described the two firms as “highly complementary businesses and a fantastic fit with very little product or customer overlap”. Both, he added “will benefit from increased scale and end-market diversification” and further M&A opportunities will be sough.

Sigura makes water care products for commercial pool and spa applications as well as industrial markets, while Solenis has two main businesses: Consumer Solutions, in the consumer and food packaging, graphic paper, and tissue and towel markets; and Industrial Solutions, in the core water treatment and wastewater markets.

Solenis CEO John Panichella will lead the combined company and following integration. Sigura CEO Robert Baird will lead a new Pool Solutions division. BASF said that it will continue to supply products to or source them from Solenis under existing mid- to long-term agreements.