Investcorp eyes Armacell dividend recap after scrapping sale process


ArmacellBahrain-based private equity firm Investcorp had scrapped the sale of German insulation business Armacell following lowball bids from private equity houses, it is understood.

The firm could now look to hold a dividend recap of Armacell’s debt according to Reuters, which cited banking sources.

Investcorp had hoped to receive about €500m for the business, but offers from Charterhouse, HgCapital and Pamplona were closer to €400m, Reuters previously reported.

Goldman Sachs Private Equity and Equistone Partners dropped out of the bidding last month.

But Reuters said a deadline for second round bids was been pushed back to March 11 after the remaining bidders looked to be preparing to make lower-than-expected offers.

Investcorp hired Barclays to arrange the long-mooted sale in October 2012, with the firm hoping to complete an exit by the end of the first quarter of this year.

The firm bought Armacell for an undisclosed amount in 2006. Reuters cited Thompson Reuters LPC data which said the deal was backed by €382.5m of debt.

Armacell’s products are mainly based on polyethylene technologies and elastomerics, its core market segment, which commands a global market share of close to 50 per cent – more than twice the size of its closest competitor.

The company spun out of Armstrong World Industries in 2000 and today has operations in the US, South America, Central and Eastern Europe, Russia and Asia.

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