The Carlyle Group, a global alternative investment firm, has bought 73.54 percent of the shares of Neochimiki for €19 ($29) per share through several block trades on the Athens Stock Exchange. It will launch a tender offer for the remaining shares. The share purchases value Neochimiki at €749 million.
Carlyle bought 20 percent of the shares from Lavrentis Lavrentiadis, the former chairman, chief executive and son of the founder of Neochimiki. The remaining shares were acquired from several international institutional shareholders.
Neochimiki distributes chemical raw materials sourced from a network of large multinational chemicals suppliers. It also produces and distributes fertilisers and raw materials for the coatings industry.
Neochimiki has more than 8,000 customers in sectors including home, personal care, food, coatings, and the automotive industry. The investment is Carlyle’s first in Greece.
“There is a both a Greek and a Balkan element to this deal presenting exciting opportunities. In Greece Neochimiki has great market positions in production and logistics, warehouses, infrastructure and so on. It’s very well secured in Greece.” But he said it is in the Balkans, especially Serbia, Romania and Bulgaria, where Carlyle aims to grow the business.
Robert Easton, a managing director at Carlyle, said: “Our aim is to keep the business intact and use the organic growth potential in the Balkans, which is quite significant.” He said it was particularly attractive that large petrochemical companies outsource at a high rate in the Balkans and in Greece.
Dresdner Kleinwort was mandated lead arranger providing financing for Carlyle and it was also joint financial advisor to Neochimiki. Emporiki, Milennium and Proton, a consortium of Greek banks also helped finance the deal.
The deal is one of a number where local banks, have used the credit squeeze as an opportunity to work on leveraged buyouts, whereas before August 2007 they would have faced strong competition from larger global banks to finance deals. Earlier this year a BC Partners-led consortium bought Migros, a Turkish supermarket chain, for YTL3.9 billion ($3.25 billion; €2.2 billion) in a transaction wholly underwritten by local banks.
Easton said: “For the local banks they’ve seen the opportunity and they’ve taken it.” He said the larger global investment banks are active and willing to lend and will finance transactions, but the inactivity of the CLO market continued to limit the amount they could lend.
For the local banks they’ve seen the opportunity and they’ve taken it.
Carlyle has made several investments in the chemicals sector. It bought AZ Electronic Materials, which supplies to the semiconductor and flat panel display industries, for €338 million in September 2004. In January 2007 it acquired HC Starck, a German provider of specialty metals, advanced ceramics and electronic chemicals, alongside Advent International, a global buyout firm, in January 2007 for €1.2 billion.
The investment was made from Carlyle's third European buyout fund, which closed in 2007 with €5.35 billion in commitments.