Bio-synthetic chemical producer Cognis has been purchased by two investment firms which plan to keep its business model and steer the company toward a public stock offering within five years.
Henkel KGaA announced Sept. 13 that it has agreed to sell its former division to Schroder Ventures and Goldman Sachs Capital Partners for EUR 2.6 billion (U.S.$2.4 billion). A partner of Frankfurt, Germany-based Schroder said the purchasers are enthused about the prospects for Cognis, one of the worlds largest manufacturers of chemicals based on natural oils and animal fats.
We see Cognis as a sizable business with a solid growth platform, Gotz Mauser said during a telephone interview Tuesday. We plan to leave operations largely in the hands of current management and hopefully conduct an IPO (initial public offering) in four or five years.
Based in Roermond, Holland, Cognis has 9,100 employees and had sales of EUR 3.2 billion (U.S.$2.96 billion) in 2000. It has three divisions: Oleochemicals, Care Chemicals and Organic Specialties. The latter produces, among other things, lubricant base stocks and chemicals, as well as finished lubricants for transmissions and axles and industrial and refrigeration applications.
Mauser said Schroder and Sachs were attracted by Cognis environmentally friendly nature.
Whenever a chemical company has a green image, its more attractive to investors, he said. Compared to petrochemical companies, theres less opportunity for fires or explosions. Youre also not exposed to the market volatility of petroleum.
Because of market uncertainty following Sept. 11 terrorist attacks in the United States, Schroder and Goldman Sachs retained the right to withdraw from the transaction within two months.
Goldman Sachs, of New York City, is one of the worlds oldest and largest investment banking firms, while London-based Schroder is one of Europes largest private equity specialists. Cognis accounted for 23 percent of Henkels sales last year. Henkel, based in Dusseldorf, Germany, has also agreed to sell its share in a joint venture with Ecolab and plans to focus on its brands and technologies in markets such as adhesives, surface treatments, detergents and cosmetics.