Doughty Hanson portfolio company Norit has entered into a definitive agreement to sell its Clean Process Technologies (CPT) division to Pentair (NYSE: PNR) for EUR503 million.
In 2010, CPT reported sales of €222 million and EBITDA of €35 million.
CPT is a global leader in membrane and clean process technologies and systems in the high growth water and beverage filtration and separation segments. CPT’s product offerings include innovative ultrafiltration and nanofiltration membrane technologies, aseptic valves, CO2 management and control systems and specialty pumping equipment and systems. Based in the Netherlands, CPT has approximately 1,200 employees and operates five production and research and development facilities.
“Under Doughty Hanson’s ownership there has been significant investment in the CPT business, including through the downturn, to ensure that it remained the innovation leader in its field. The sale price reflects the quality of the business and its management team as well as the significant synergy benefits that its combination with Pentair will create,” says Mark Corbidge, Co-Head of Private Equity at Doughty Hanson.
Following the divestment of CPT, Doughty Hanson will continue to own the majority stake in Norit and its Activated Carbon division alongside Norit management. The business has operations in both Europe and the US and accounted for over 60% of Norit’s Group EBITDA in 2010.
Norit’s Activated Carbon business has performed strongly under Doughty Hanson’s ownership with an EBITDA compound annual growth rate of almost 30% since 2007. This growth has been supported by significant investment in this period to expand its production capacity. Following the announcement of this transaction, we are actively pursuing a refinancing of the Activated Carbon business with a view to optimising its capital structure.
“The prospects for the Activated Carbon business remain excellent." says Corbridge. "This is driven by a combination of increased regulations around health and environmental issues and also the continued recovery in industrial applications. The recent announcement of the mercury and toxic standards rule (MACT) by the Environmental Protection Agency will have a significant positive impact on the business going forward.”
The sale of CPT is expected to close in the second quarter of 2011, subject to satisfaction of customary conditions and applicable regulatory approval.