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Buyout Firm PAI Partners Acquires Blackstone’s Armacell

Buyout Firm PAI Partners Acquires Blackstone’s Armacell

(Bloomberg) -- Buyout firm PAI Partners reached an agreement to take control of Armacell International, which makes insulation products used by the International Space Station.

Blackstone Group Inc. is exiting its investment in Armacell through the deal, PAI said in a statement on Wednesday, confirming a Bloomberg News report. PAI is acquiring a majority stake in a transaction valuing the business at about 1.4 billion euros ($1.6 billion) including debt, a person familiar with the matter said, asking not to be identified as the information is private.

Kirkbi AS, owned by the family behind the Lego toy brand, will increase its stake in Armacell to a significant minority holding, according to the statement. It didn’t provide financial details.

“Under the leadership of its existing management team, Armacell has delivered consistent growth,” PAI Partner Mathieu Paillatt said in a statement. “We expect to drive Armacell’s further expansion through product innovation, commercial excellence and a number of strategic acquisitions.”

Blackstone and Kirkbi bought Armacell from Charterhouse Capital Partners in 2015 and have been exploring a sale, Bloomberg News reported in July. The sale had attracted initial interest from other buyout firms and pension funds, people familiar with the matter said in November.

A sale of the business would come at a time when private equity firms are deploying billions of dollars of capital on European assets as they seek to deploy record amount of money they have raised. Large businesses such as Nestle SA’s skin-care unit and Merlin Entertainments Plc have been acquired by buyout firms this year.

Armacell, founded in 1954, has made products used everywhere from the Empire State Building to the Gorgon natural gas project in Western Australia. The Luxembourg-based company had 610 million euros of net sales in 2018 and adjusted earnings before interest, tax, depreciation and amortization of 106 million euros, according to its annual report.

--With assistance from Aaron Kirchfeld.

To contact the reporters on this story: Sarah Syed in London at ssyed35@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Matthew Monks

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