Lone Star Agrees to Buy CVC’s Chemical Firm AOC for $2.4 Billion

Private equity firm Lone Star Funds has agreed to buy chemicals company AOC from buyout firm CVC Capital Partners.

The planned transaction is subject to regulatory approval and consultations with AOC’s workers’ council, according to an emailed statement Tuesday, which confirmed an earlier Bloomberg News report. Financial terms weren’t disclosed.

The deal values the Dutch business at about 2 billion euros ($2.4 billion) including debt, according to people familiar with the matter, who asked not to be identified discussing confidential information.

Royal DSM NV, which owns a minority stake in AOC through the contribution of its composite resins business in 2015, expects to receive about 300 million euros in cash from the transaction, according to a separate statement.

Lone Star emerged as the frontrunner to acquire AOC at the end of June, moving ahead of other suitors, people familiar previously said. CVC acquired Alpha Corp. in 2018 and combined it with an existing portfolio company, later re-branding them as AOC. Based in Schiphol, Netherlands, AOC has production facilities in the U.S., Canada, Mexico, Europe and Asia and supplies specialty resins for use in the construction, automotive and marine industries.

A surge in buyout activity contributed to a deal volume of $2.5 trillion in the first half of 2021, putting this year on track to be the most active ever. Private equity firms have started spending their significant amounts of dry powder, sealing more than $550 billion of deals in the busiest six months on record, according to data compiled by Bloomberg.

CVC was advised by JPMorgan Chase & Co. and BNP Paribas SA, while Lone Star worked with Lazard Ltd. AOC’s management was advised by Jamieson Corporate Finance. Bank of America Corp. and Royal Bank of Canada provided financing, according to the statement.

©2021 Bloomberg L.P.

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