Monday, February 4, 2013

CVC buys 80% stake in Lenzing for Euro270m (2001)

LONDON (CNI)--CVC, the UK private equity company with a growing chemicals and fibres portfolio, said Thursday it is to buy Bank Austria's 80% stake in Austrian fibres maker Lenzing.

It plans to create a new company combining Lenzing with the cellulose-based activities of Acordis, the Dutch fibres manufacturer in which it has a 64% stake.

Bank Austria announced today it is to sell its 80% stake in Lenzing to CVC for Euro90/share in cash, or a total of Euro270m ($250m). The transaction, which will give the bank a Euro52m capital gain, is subject to regulatory approval.

The bank said the new Lenzing/Acordis combination will be the world's largest producer of cellulose fibres with sales of Euro1.4bn. CVC said it expects to expand the Lenzing production sites in Lenzing and Heiligenkreuz, Austria.

Acordis said the activities it will sell to the new company are: viscose staple, Tencel, viscose filament (Enka), acetate filament (Novaceta, a 50:50 joint venture with Italy's Snia), industrial rayon yarn (Cordenka) and the acrylic fibre operation in Kelheim, Germany. A company spokesman said these businesses generate revenues of about Euro800m - representing about 35-40% of the company's total sales - and about 4600 employees.

Following the sale of its cellulose-based activities, Acordis will continue to focus on its remaining industrial business units, which mainly comprise industrial fibres and the Colbond industrial non-wovens and geo textiles, the spokesman said. No financial details of this sale were disclosed.

The new company will be 54% owned by private equity funds advised by CVC. About 18% will be held by various Austrian co-investors, 18% will be held by Acordis and 10% will be held by the management of the new company.

Bank Austria revealed today that its Lenzing stake totals 80%, including its 50.1% industrial stake. A spokesman said the bank holds the remainder through its equity trading portfolio.

(The EC later blocked this acquisition on the grounds that it would give Acordis a near-monopoly in EU viscose and lyocell fibres.  Later still it allowed Lenzing to acquire Tencel, apparently ignoring the same monopoly.  More to come...)

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