12 November 2003
Chemical firm switches hands
Chemical maker Kraton Polymers will transfer from one buyout firm to another, as Texas Pacific Group will pay $770 million to Ripplewood Holdings.
With sales of $600 million a year, Houston-based Kraton is a leading maker of styrenic block copolymers, which is a family of chemicals used in adhesives, sealants, and other materials. It generated $107 million in earnings before interest, taxes, depreciation, and amortization in the year to 30 September, Ripplewood officials said.
New York–based Ripplewood, which manages about $4 billion, bought Kraton in February 2001 from Royal Dutch/Shell Group for $520 million. Ian Snow, a Ripplewood managing director, said the firm will make a positive return on the sale after an auction involving mostly private equity buyers.
"There were a number of logical strategic [company] buyers, but now was not a good time for many of them," said Snow, referring to the sluggish growth among chemical companies that has limited their acquisition appetites.
There has been quite a few private equity deals of late. In October Thomas H. Lee Partners bought Michael Foods from Vestar Capital Partners. In addition the Credit Suisse First Boston buyout arm agreed to buy United American Energy Holdings from Fox Paine & Co. and partners.
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