One Equity Partners has completed the sale of PeroxyChem, a maker of peroxygen chemistries, to publicly traded Evonik Industries for $640 million. The valuation multiple for this transaction appears below.
PeroxyChem is a manufacturer of hydrogen peroxide, peracetic acid, calcium peroxide, and persulfates in a range of concentrations and purities. The company’s products are used in applications in electronics, energy, environmental, food safety, pulp, paper, polymer, and other industrial and consumer markets.
The sale of PeroxyChem to Evonik was originally announced in November 2018 at a valuation of $625 million, but the closing was delayed as a result of a lawsuit filed by the Federal Trade Commission (FTC) in August 2019. The recently dismissed (January 2020) FTC lawsuit had cited concerns that the acquisition would lead to higher prices for hydrogen peroxide.
PeroxyChem, led by CEO Bruce Lerner, is headquartered in Philadelphia and employs approximately 600 people worldwide with eight production sites located mainly in North America but also in Germany, Spain, and Thailand.
“The expertise and resources OEP brought to PeroxyChem were instrumental in our recent growth and evolution,” said Mr. Lerner. “Today, our focus on high-growth, high-margin, and less cyclical end markets has enabled our business to be well-positioned for continued success.”
One Equity acquired PeroxyChem (formerly FMC Global Peroxygens) in March 2014 from FMC Corporation for approximately $200 million. The sale of PeroxyChem to Evonik for $640 million values the company at 9.9 times EBITDA before synergies.
During OEP’s ownership term, PeroxyChem opened a new hydrogen peroxide purification plant in Saratoga Springs, New York, to serve the electronics market (2015); constructed a wastewater treatment facility in Memphis, Tennessee (2017); and made two add-on acquisitions including the buy of Synergy Technologies, a Shreveport, Louisiana-based maker of antimicrobial products, in 2016.
“We congratulate everyone at PeroxyChem for transforming the company into a global leader in oxidation solutions for food processing, semiconductor purification and industrial anti-microbial applications,” said David Han, a senior managing director of OEP and chairman of PeroxyChem. “We would like to thank PeroxyChem’s management led by Bruce Lerner for the opportunity to partner with the company and Harold Nidetz and Kevin Boyle, our directors and OEP operating professionals, for their valuable operational and strategic guidance throughout the partnership.”
One Equity Partners, founded in 2001, was spun out of JP Morgan in 2015. The firm invests from $30 million to $300 million in industrial, healthcare, and technology companies that are based in North America and Europe. In October 2019, OEP held a final closing of its seventh fund, One Equity Partners VII LP, with $1.75 billion in total capital commitments, the largest fund that OEP has ever raised. OEP has offices in New York, Chicago and Frankfurt.
Evonik Industries is one of the largest specialty chemicals company in the world with annual revenues of more than €13 billion. The company is publicly traded on the Frankfurt Stock Exchange (FWB: EVK) and is headquartered in Essen, Germany.
© 2020 Private Equity Professional | February 4, 2020