Rockwood Holdings, Inc. (ROC) said Sunday that it has agreed to sell its German ceramic materials business CeramTec to European private equity firm Cinven Partners LLP for gross proceeds of 1.49 billion euros, or $1.98 billion. Rockwood noted that the sale will enable it to become a more focused specialty chemical company.
Cinven said it has obtained fully committed financing for the transaction, which is expected to close during the third quarter of 2013 following regulatory approvals. This includes approval from the EU Competition Clearance Authority.
CeramTec, headquartered in Plochingen, Germany, is a producer of high performance advanced ceramics materials and products. With about 3,000 employees and 18 facilities globally, it serves four principal end-markets - medical, electronics, industrial and automotive.
CeramTec operates in various niche markets such as medical products, cutting tools and mechanical applications. The company generated revenue of 425 million euros in 2012.
Commenting on the deal, Seifi Ghasemi, Chairman and CEO of Rockwood said, "We expect to use the substantial net cash proceeds to support our balanced approach to debt reduction, return of capital to shareholders and re-investment in our complementary growth core businesses."
Lazard acted as Rockwood's financial advisor, while Willkie Farr & Gallagher LLP as its legal advisor.
Meanwhile, Cinven reportedly said it was keen to support CeramTec's growth outside its core European markets, specifically in North America and Asia, both organically and through acquisitions.
Cinven will also support CeramTec's ongoing investments and new product initiatives such as LED lightning and semiconductor applications.
Founded in 1977, Cinven is a European private equity firm, with offices in Guernsey, London, Frankfurt, Paris, Milan, Luxembourg and Hong Kong. The company focuses on six sectors - business services, consumer, financial services, healthcare, industrials, and technology, media and telecommunications.
Last Thursday, Cinven said it raised 5.3 billion euros for its fifth European buyout fund.
In mid-December 2012, Cinven and Italian aerospace company Finmeccanica SpA (FINMY) agreed to sell the aviation business of Avio SpA, an Italian maker of aviation propulsion components and systems, to diversified conglomerate General Electric Co. (GE) for $4.3 billion.
ROC closed Friday's regular trading at $66.56, up $1.31 or 2.01 percent on a volume of 1.12 million shares.
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