CHEMICAL maker Cabot has revealed plans to buy Netherlands-based activated carbon manufacturer Norit from its private equity owners for $1.1bn (£703m) to focus on higher-margin specialty chemicals.
Cabot will buy Norit from affiliates of British private equity fund Doughty Hanson and Dutch investment firm Euroland Investments. Norit was acquired by a group of investors led by Doughty Hanson in 2007.
“This acquisition supports the ongoing transformation of our portfolio to a higher margin, less cyclical, specialty chemicals-focused company,” said Cabot chief executive Patrick Prevost.
Doughty Hanson senior principal and co-head of private equity Mark Corbidge said: “The sale of Norit concludes an excellent investment for Doughty Hanson. During our ownership, we invested significant time and capital in Norit and helped it to become a truly world class business.”
Leading chemical companies such as Dow Chemical, German BASF and Ashland are focusing on speciality chemicals, demand for which tends to be resilient during economic downturns. Specialty chemicals are widely used in water purifiers, pharmaceuticals, skin creams, hair gels and cosmetics.
Norit has 10 plants in the Americas and Europe that make activated carbon, used in purification and filtration processes, food and pharma.
The company, which sold its Clean Process Technologies unit to Pentair for €503m last year, had sales of $360m and earnings before interest, taxes, depreciation, and amortisation of $92m in 2011.
If completed, the Norit deal will be Cabot’s largest to date. JP Morgan was Cabot’s financial adviser.
City A.M. Reporter