CVC to pay €2.4bn for German chemicals

The European buyout firm is set to take a 25% stake in Evonik, a German state-backed conglomerate that also reportedly interested US mega-firms KKR, Bain and Blackstone.

CVC Capital Partners has agreed to pay €2.4 billion ($3.7 billion) for a 25 percent stake in Evonik, a German chemicals conglomerate looking to list on Frankfurt’s DAX exchange.
 
“We are proud that our investment will contribute toward establishing a new DAX company in the medium term,” Steve Koltes, a CVC managing partner, said in a statement.
 
The stake is being sold by the RAG Foundation, a state-backed entity charged with advising Evonik’s access to capital markets and to take on the liabilities associated with the wind down of Germany’s hard coal mining activities.
 
Aside from Luxembourg-headquartered CVC, fellow mega-firms Bain Capital, The Blackstone Group and Kohlberg Kravis Roberts had also been interested in Evonik, according to a Wall Street Journal blog post.
 
Wilhelm Bonse-Geuking, RAG’s chief executive, said in a statement there were several reasons CVC was selected as a buyer.
 
“CVC has extensive industry experience in the chemical and energy sectors coupled with a highly experienced team in Germany,” he said. “We share a common view with regard to the development potential in Evonik Industries and CVC has a strong track record in the management of IPOs across a number of its portfolio companies.”

CVC also highlighted its experience as a minority investor in state-owned enterprises such as the Belgian Post Office.
 
The firm is currently investing its fifth buyout fund, which closed on €12.1 billion in March.