Solenis acquired in $5.25B private equity merger deal
WILMINGTON – Solenis, the global producer of specialty chemicals used in water-intensive industries, was sold Tuesday in a deal worth $5.25 billion between private equity funds.
Platinum Equity, a California-based private equity investment firm that focuses on leveraged buyouts, closed the deal with Solenis’ owners, New York-based private equity firm Clayton, Dubilier & Rice (CD&R) and German chemical company BASF. Prior to the deal’s announcement, reports had filtered out that Solenis’ ownership firms were also looking at potentially taking the company public after seven years of private control.
Solenis emerged from former Hercules and Ashland water treatment divisions dating back to 1907, launching its current iteration in 2015. The company, which opened a new headquarters at Avenue North off U.S. Route 202 last year, has a global footprint spanning 120 countries, five continents, 41 manufacturing facilities and over 5,200 employees. It employs several hundred people in Delaware at the headquarters and a research and development lab leased on the Ashland campus off Hercules Road.
CD&R acquired a 51% majority stake in Solenis from Ashland in a July 2014 deal pegged at an enterprise valuation of $1.8 billion. In 2019, Solenis merged with BASF’s Paper & Water Chemicals business, giving the German giant a 49% stake and creating a leading solutions provider for the pulp and paper, and water treatment industries. Both CD&R and BASF will exit Solenis as a result of the Platinum Equity acquisition.
“We’re proud to have supported Solenis’ growth strategy and have enjoyed working alongside the company’s talented team since our initial investment in 2014,” CD&R Partner Stephen Shapiro said in a statement. “In that time, Solenis has significantly expanded its global presence, strengthened its customer offerings, and emerged as a sustainability leader. We’re pleased to have found a strong new investment partner for Solenis and look forward to following the company’s continued success.”
As part of the transaction, which includes debt, Solenis will merge with Georgia-based Sigura Water, an existing Platinum Equity portfolio company the firm acquired in 2019, for a total combined deal value of approximately $6.5 billion. Sigura has six production facilities on four continents and 1,000 employees globally.
The combined company, which will be led by Solenis CEO John Panichella, is expected to generate approximately $3.5 billion of revenue and global customers in consumer, industrial and pool water treatment markets. Sigura CEO Robert Baird will lead the new Pool Solutions division at Solenis once the merger is completed.
“Global demand for solutions that save water, use less energy, eliminate waste, and convert everyday products into more sustainable materials is only continuing to grow,” said Jacob Kotzubei, partner at Platinum Equity, in a statement announcing the deal. “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 for food packaging, graphic paper, and tissue and towel markets; and industrial solutions for 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 as well as 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, in a statement. “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 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.”
Golditch added that Solenis could continue to grow, as Platinum Equity continues “seeking new opportunities to grow the combined company through additional strategic [merger and acquisition].”
The acquisition of Solenis and merger with Sigura are expected to be completed before the end 2021, subject to regulatory approval and customary closing conditions.