Specialty chemical manufacturer Solenis and hygiene solutions provider Diversey Holdings have announced a definitive merger agreement, in which Solenis will acquire Diversey in an all-cash transaction valued at approximately $4.6 billion. Following the merger, Diversey will become a private company.
Solenis, headquartered in Wilmington, Delaware, was acquired by Platinum Equity in 2021 and produces specialty chemicals for water-intensive industries. Meanwhile, Diversey, based in Fort Mill, South Carolina, offers hygiene, infection prevention, and cleaning solutions.
Phil Wieland, CEO of Diversey, said: “The merger presents a unique opportunity to enhance value and create a more diversified business with increased scale, broader global reach, and superior customer service capabilities. It will enable the combined company to grow and provide a number of attractive cross-selling opportunities, including meeting increasing customer demand for water management, cleaning and hygiene solutions.”
Following the integration, Solenis CEO John Panichella will lead the combined company. Panichella said: “This is a strategic combination of two leading global products, services, and technologies providers with proven track records of product innovation who offer truly differentiated solutions to customers. In combining these two complementary businesses, we expect to usher in a new and exciting chapter in our long history of helping customers tackle core challenges such as water and energy management, partnering on sustainability issues to work towards a cleaner, safer world, and reducing environmental impacts. With continued support from Platinum Equity and now Bain Capital, we are confident that we’ll maximize the opportunities ahead.”
The transaction will be financed by a combination of committed debt and equity financing, including Bain Capital’s contribution. The merger is expected to be completed in the second half of 2023, subject to customary closing conditions, including approval by Diversey shareholders holding a majority of the outstanding shares of the company and receipt of regulatory approvals.
In connection with the merger, Solenis has entered into a support agreement with Bain Capital, pursuant to which Bain Capital has agreed to vote all of its Diversey shares in favor of the transaction, subject to certain terms and conditions set forth therein.
Diversey’s Board of Directors unanimously approved the merger and recommended that Diversey shareholders vote in favor of the merger. The Special Committee negotiated the terms of the merger agreement with assistance from its independent financial and legal advisors.
Following the announcement of the merger, Diversey will not host an earnings conference call or provide financial guidance in conjunction with its earnings release for the fourth quarter and full year 2022 financial results. Diversey will, however, issue earnings releases consistent with its current schedule, including financial results for the fourth quarter and full year 2022, but will suspend hosting earnings conference calls and webcasts.
J.P. Morgan Securities LLC and Centerview Partners LLC are serving as financial advisors to Diversey on the transaction, while BofA Securities, Goldman Sachs, and Piper Sandler are serving as financial advisors to Solenis on the transaction. Wachtell, Lipton, Rosen & Katz and Kirkland & Ellis LLP are serving as legal counsel to the respective parties.