WENDEL: Wendel grants exclusivity to DuluxGroup for the sale of
Cromology
PRESS RELEASE – October 20, 2021
Wendel grants exclusivity to DuluxGroup for
the sale of Cromology
Wendel received a firm offer from DuluxGroup to
acquire 100% of the equity of Cromology (“The Company”), a European
leader in decorative paints. The Company designs, manufactures,
sells and distributes a wide range of decorative paints and
products to professionals and consumers through its presence in
eight European countries. 65% of its activity is in France, 35% in
Southern Europe and in the rest of the world.
Given the industrial and financial quality of
DuluxGroup’s proposal, Wendel has decided to enter into an
exclusivity period with DuluxGroup to finalize the transaction.
DuluxGroup proposes to acquire 100% of the
equity of the Company for an enterprise value of around €1,262M,
which represents a multiple of 13.2 times LTM EBITDA1 as of June
30, 2021. For Wendel, net proceeds2 would amount to c.€907M. This
would represent a multiple of 1.6 times Wendel’s total investment
in Materis Group since 2006.
The closing of the transaction should take place
during the first half of 2022, subject to customary regulatory
approvals.
André François-Poncet, Wendel Group’s
CEO, said: “Cromology’s history within Wendel's portfolio
highlights the authenticity of our long-term investor model, which
has allowed us to support the Company at critical times. When we
made the decision early 2019 to reinvest €125M in the Company, we
were confident that the new management team we had put in place the
year before would be able to create sustainable value for its
shareholders and stakeholders. Furthermore, all Cromology's teams
demonstrated their commitment and resilience during the Covid-19
crisis, allowing the Company to deliver outstanding operational as
well as financial and extra financial performance.”
Pierre Pouletty, Chairman of Cromology,
commented: “The proposal of DuluxGroup gives me the
opportunity to thank Wendel on behalf of the entire Cromology team:
during the significant difficulties which the group Cromology
encountered in 2018, Wendel made the decision to totally refinance
the Company in view of the proposed turnaround plan. This step has
allowed Loïc Derrien, the Group's CEO, and the entire Cromology
team to achieve an exceptional job for the past 3 years. The offer
from DuluxGroup should allow Cromology to continue its
transformation and development.”
Loic Derrien, CEO of Cromology,
commented: “During the last 3 years, Cromology's team has
revealed the potential of the Company, its products and its brands.
Being part of DuluxGroup should allow Cromology to continue its
development in Europe, leveraging on DuluxGroup's technologies and
know-how, in perfect line with its CSR strategy.”
History of Wendel’s Investment in
Cromology
In 2006, Wendel acquired the Materis Group,
which comprised four divisions: Aluminates (Kerneos), Mortars
(ParexGroup), Admixtures (Chryso) and Paints (Materis Paints). In
2014, the Materis Group fully refocused its operations on its
Paints business, selling Kerneos in March, ParexGroup in June and
Chryso in October of that year for total net sales proceeds of
€1.7 billion in order to reduce its debt. On July 7,
2015, Materis Paints, the last Group division, rebranded as
Cromology and set its sights on new challenges.
On May 13, 2019, Wendel signed an agreement
to renegotiate the financial debt of Cromology. End of May 2019,
Wendel invested €125 million in equity alongside the new
management team led by Pierre Pouletty, new Chairman of the company
appointed in June 2018, and Loïc Derrien, appointed Chief Executive
Officer in August of the same year. The new equity contributed by
Wendel strengthened the company’s financial structure, in
particular by reducing its debt burden. The new equity also enabled
the company to implement its transformation plan and finance its
investments.
In total, Wendel made an investment of €550M in
Materis Group, of which €125M in 2019 in Cromology. Supported by
Wendel, the new management team has successfully conducted the
company's strategic and operational refocusing since the end of
2018, enabling it to weather the Covid crisis outstandingly. As a
result, the EBITDA margin has reached a record level of 19.7%3, and
financial leverage has been reduced to 0.054x at the end of June
2021.
ESG achievements since 2006
Since Materis Group was acquired by Wendel in
2006, Cromology engaged a proactive approach to promote the
environmental and social performance of the company and its
products. Cromology puts ESG at the heart of its strategy, on par
with profitable growth and operational excellence. In its ESG
roadmap published in 2020, Cromology focuses on five priorities:
human resources, business ethics, health and safety, respect for
the environment, and the quality of paints.
Consequently,100%5 of the Group’s industrial
sites today hold a health and safety certification6, and 70% hold
an environmental management certification7, with a target coverage
of 100% set for 2023. Cromology also works to engage its
entire value chain in its corporate social responsibility strategy:
80% of the total volume of raw materials purchases comes from
suppliers who have signed the responsible procurement charter of
the company and undertake to respect its principles. Lastly,
Cromology strives to continuously propose paints and colors which
respect the user and the environment: in 2020, almost half of the
company’s revenues of paints were generated through the sale of
paints holding a European environmental label.
1 Enterprise value and EBITDA exclude the impact
of IFRS 16
2 Net proceeds after financial debt, dilution to
the benefit of the Company’s minority investors, transaction costs
and other debt-like adjustments
3 Include the impact of IFRS 16
4 Based on bank documentation definition
5 All data as of December 31st, 2020
6 OHSAS 18001 or ISO 45001 certification
7 ISO 14 001 certification
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