The Acquisition of Europe’s Second Largest PVC Producer Includes Option to Acquire Kem One Innovative Vinyls
LOS ANGELES, CA and PARIS, FRANCE – December 20, 2013 – OpenGate Capital, a global private buyout firm, announced today that, through a joint partnership with Alain de Krassny, it has won a takeover bid to acquire Kem One SAS, Europe’s second largest producer of PVC products that was put into administration by the commercial court of Lyon in France in March of 2013. Kem One SAS was previously owned by the Klesch Group which had acquired the business in July of 2012 from Arkema. Under terms of the takeover, the OpenGate Capital / Krassny partnership has also secured an option to acquire the complementary downstream operations known as Kem One Innovative Vinyls, subject to customary due diligence.
Kem One SAS is the fully integrated upstream operation that produces PVC resins with operations across seven plants, including six in France and one in Spain, and sales offices in Germany and Italy. The business has a production capacity of more than 900 thousand tons of PVC and 660 thousand tons of caustic soda per year, employs more than 1,300 people, and has revenues nearing €800 million or more than USD $1.1 billion.
Andrew Nikou, OpenGate Capital’s founder, Managing Partner and CEO stated, “Our interest in Kem One began with a commitment to learn about the business to see if it could be a good fit with our investment strategy. As we uncovered some operational challenges we also saw tremendous potential in the business and synergies with our other PVC business, Profialis and potentially Benvic. Almost immediately, our interests were confirmed and we applied a full-court press to win the process. Throughout the past eight months, the period over which this process has taken place, we never faltered. Through our European team’s tenacity and tireless resolve, we succeeded. I am incredibly proud of our global team and excited to welcome Kem One to the OpenGate Capital portfolio.”
OpenGate Capital acquired a French/Belgian PVC window and door profiles manufacturer, Profialis, earlier this year from Tessenderlo Group and recently announced an exclusive agreement with Solvay to acquire Benvic, a specialty PVC compounds producer with operations in France, Italy and Spain.
Alain de Krassny, a veteran in the European chemicals industry and President of Donau Chemie, also commented stating, “I am thrilled to be working with OpenGate Capital on the transition and operation of Kem One. The combination of my industry experience and OpenGate Capital’s acquisition and operation skills creates a uniquely qualified team that can handle the many complex aspects of this acquisition.”
From OpenGate Capital’s European office, the firm’s Partners, Julien Lagrèze and Sébastien Kiekert Le Moult, led the process from negotiations and meetings with Kem One management, suppliers, and vendors through discussions with key representatives from the French government.
Julien Lagrèze stated, “Kem One is perfectly suited for OpenGate Capital’s strengths in acquiring and transitioning operationally complex businesses. The business has one of the finest industrial infrastructures in the industry and a truly unique position in the market. The staff at Kem One has done an exceptional job maintaining focus throughout this very uncertain period leading up to this announcement, which is a testament to the quality and drive of all of the employees and leadership team.”
Sébastien Kiekert Le Moult commented on the acquisition stating, “We have met with several industry experts, and the many suppliers and customers of Kem One who, like us see a tremendous need to maintain the business over the long run. We are going to implement new strategies for both internal operations and external processes to enhance the overall well-being of the organization.” Le Moult went on to say, “This deal is really unique in that it came together through the combined efforts of the key suppliers and partners of Kem One, especially EDF, Arkema, Total, and Lyondellbasell, and through the tremendous support and financing of the French government.”
Kem One SAS becomes the 14th business to join the OpenGate Capital portfolio, pushing combined gross revenues to $3 billion and the number of employees approaching 8,000 worldwide.
Advisors to this transaction included Lionel Spizzichino, Legal Restructuring, and Edith Boucaya, Legal M&A, Paul Hastings LLP; Mounir Letayf, Legal, Guillaume Jolly, Legal Tax, Edgard Nguyen, Legal Corporate, and Dimitri Dimitrov, Legal Antitrust, Gide Loyrette Nouel; Stephane Vital-Durand, Legal M&A, Colbert Avocats; and Jamal Gartili, Accounting, Cabinet Gartili.
About Kem One
KEM ONE, a fully integrated vinyl production company with upstream PVC and caustic soda production operations (Kem One SAS) and downstream profiles, tubes and compounds manufacturing (Kem One Innovative Vinyls), was established mid-2012 following the acquisition of Arkema’s vinyl products division by the Klesch Group. The company employs 2,600 people at 22 manufacturing sites, primarily in Europe but also in Asia and North America. Europe’s second largest producer of PVC, following the announced Ineos / Solvay joint venture, with revenues well in excess of one billion euros, KEM ONE continues to grow and build on its numerous strengths with a view to becoming market leader for integrated vinyl solutions.
About OpenGate Capital
OpenGate Capital is a global private investment firm specializing in the acquisition and operation of businesses seeking revitalization through growth and operational improvements. Established in 2005, OpenGate Capital is headquartered in Los Angeles, California and maintains offices in Paris, France and São Paulo, Brazil. OpenGate’s seasoned professionals possess the critical skills needed to acquire, transition, operate and build successful businesses. To date, OpenGate Capital has executed more than 30 transactions ranging from corporate divestitures to turnaround acquisitions, industry consolidations and other special situation investments. The OpenGate portfolio of wholly owned businesses generates nearly $3 billion in revenue and includes businesses from a wide range of industries and geographic markets. For more information, please visit www.opengatecapital.com
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