DSM to divest majority stake in ACN, capro businesses to CVC

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LONDON (ICIS)–DSM is to sell a majority stake in its caprolactam (capro) and acrylonitrile (ACN) operations to UK-headquartered private equity firm CVC Capital Partners in a deal that will see those businesses spun off into a new company, the Netherlands-focused chemicals producer said on Monday.

The polymer intermediates and composite resins businesses are no longer a strong fit for DSM, which is looking to intensify its focus on nutrition and performance materials products. DSM counts activist investor Third Point as an indirect stakeholder

Known for the time being as NewCo, the business will be 65% owned by CVC and 35% owned by DSM. The deal has an enterprise value of €600m and is expected to close in the third quarter of this year, DSM added.

“NewCo will operate as an independent, dedicated company under the leadership of CVC. DSM can now focus fully on improving the operational performance of its Nutrition and Performance Materials businesses as well as benefitting from the future value creation in this new venture,” said DSM CEO Feike Sijbesma.

As part of the deal, DSM said it will contribute its global capro business (Europe, North America, its 60% stake in DNCC (China) and the capro licensing business), DSM’s ACN business and DSM’s Composite Resins business, including its 75% stake in JDR (China).

DSM’s 65% stake in the service organisation Sitech Services held via its capro and ACN businesses will also be transferred to NewCo, it said.

“The partnership with CVC allows DSM to further reduce the cyclicality of its portfolio, secure a long-term competitive supply position of caprolactam for DSM Engineering Plastics and fully focus on the Nutrition, Performance Materials and Innovation activities,” the company said.

NewCo will operate as an independent company with three business units: capro, ACN and composite resins, according to DSM.

Pro-forma third party sales of NewCo amounted to €2.1bn in 2014 with an earnings before interest, tax, depreciation and amortisation (EBITDA) of €106m, it added.

CVC also holds positions in Germany-based chemicals producer Evonik, and US-headquartered distributor Univar.