WILMINGTON, Del. & FORT MILL, S.C.–(BUSINESS WIRE)–Solenis and Diversey Holdings, Ltd.(NASDAQ: DSEY) today announced they have entered into a definitive merger agreement under which Solenis will acquire Diversey in an all-cash transaction valued at an enterprise value of approximately $4.6 billion. Upon completion of the merger, Diversey will become a private company.
Under the terms of the agreement, Diversey shareholders (other than shareholders affiliated with Bain Capital Private Equity (“Bain Capital”)) will receive $8.40 per share in cash, which represents a premium of approximately 41.0% over Diversey’s closing share price on March 7, 2023, the last full trading day prior to the transaction announcement, and a premium of approximately 59.0% over Diversey’s 90-day volume-weighted average price (VWAP). Bain Capital will receive $7.84 per share in cash and will rollover a portion of its shares of Diversey into an affiliate of Solenis in exchange for common and preferred units of such affiliate.
Headquartered in Wilmington, Delaware, Solenis is a leading manufacturer of specialty chemicals used in water-intensive industries, which was acquired by Platinum Equity in 2021. Diversey is a leading provider of hygiene, infection prevention and cleaning solutions based in Fort Mill, South Carolina.
“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,” said Phil Wieland, Chief Executive Officer of Diversey.
Solenis CEO John Panichella will lead the combined company following the transition and integration.
“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,” said Mr. Panichella. “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.”
“This is a merger of two leading businesses that is fully complementary,” added Eric Foss, Non-Executive Chairman of the Board of Directors of Diversey. “We believe the transaction creates significant value realization for our shareholders.”
Transaction Details
Solenis is a portfolio company of Platinum Equity. Bain Capital, which invested in Diversey in 2017 and subsequently took the Company public in 2021, is currently the largest shareholder of Diversey. Under the terms of the transaction, Bain Capital will contribute approximately 56% of its existing equity into Solenis at an implied value per Diversey share of $7.84 and will sell its remaining shares to Solenis for cash at the same price. After negotiations with a special committee of Diversey’s Board of Directors composed entirely of independent directors (the “Special Committee”), Bain Capital agreed to accept less consideration per share than the consideration to be paid to the other holders of Diversey’s shares.
Diversey’s Board of Directors formed the Special Committee to evaluate and negotiate the transaction with the assistance of independent financial and legal advisors. Following this process, the Special Committee unanimously determined that the transaction with Solenis is in the best interests of Diversey and its shareholders, and, acting upon unanimous recommendation by the Special Committee, the Diversey 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.
In connection with the transaction, Solenis has entered into a support agreement with Bain Capital, pursuant to which Bain Capital has agreed to vote all of its Diversey shares (which represent approximately 73% of Diversey’s outstanding shares) in favor of the transaction, subject to certain terms and conditions set forth therein. Solenis intends to finance the transaction with a combination of committed debt and equity financing, including the contribution by Bain Capital.
The merger is expected to be completed in the second half of 2023, subject to the satisfaction of customary closing conditions, including approval by Diversey shareholders holding a majority of the outstanding shares of the Company and receipt of regulatory approvals. Upon closing of the transaction, Diversey’s ordinary shares will no longer be listed on any public market.
Fourth Quarter and Full Year 2022 Earnings Conference Call Update
In light of today’s announcement, 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. Going forward, Diversey will 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.
Advisors
Evercore is serving as financial advisor to the Special Committee and Wachtell, Lipton, Rosen & Katz is serving as the Special Committee’s legal counsel.
J.P. Morgan Securities LLC and Centerview Partners LLC are serving as financial advisors to Diversey on the transaction. Kirkland & Ellis LLP is providing legal counsel to Bain Capital and Diversey.
BofA Securities, Goldman Sachs and Piper Sandler are serving as financial advisors to Solenis on the transaction. Gibson, Dunn & Crutcher LLP is providing legal counsel and Willkie Farr & Gallagher LLP is providing debt financing counsel to Platinum Equity and Solenis. BofA Securities and Goldman Sachs are leading the debt financing for the acquisition.
About Diversey
Diversey’s purpose is to go beyond clean to take care of what’s precious through leading hygiene, infection prevention and cleaning solutions. We develop and deliver innovative, mission-critical products, services and technologies that save lives and protect our environment. Over the course of 100 years, the Diversey brand has become synonymous with product quality, service and innovation. Our fully-integrated suite of solutions combines patented chemicals, dosing and dispensing equipment, cleaning machines, services and ancillary digital analysis and serves more than 85,000 customers in over 80 countries via our vast network of approximately 9,000 employees globally.
For additional information about Diversey, please visit www.Diversey.com or follow us on LinkedIn, Facebook, or Twitter @Diversey.
About Solenis
Solenis is a leading global producer of specialty chemicals focused on delivering sustainable solutions for water-intensive industries, including the pulp, packaging paper and board, tissue and towel, oil and gas, petroleum refining, chemical processing, mineral processing, biorefining, power, municipal, and pool and spa markets. The company’s product portfolio includes a broad array of water treatment chemistries, process aids and functional additives, as well as state-of-the-art monitoring and control systems. These technologies are used by customers to improve operational efficiencies, enhance product quality, protect plant assets, minimize environmental impact and maintain healthy water. Headquartered in Wilmington, Delaware, the company has 49 manufacturing facilities strategically located around the globe and employs a team of over 6,500 professionals in 130 countries across six continents. Solenis is a 2022 US Best Managed Company.
For additional information about Solenis, please visit www.Solenis.com or follow us on social media.
About Bain Capital Private Equity
Bain Capital Private Equity has partnered closely with management teams to provide the strategic resources that build great companies and help them thrive since its founding in 1984. Bain Capital Private Equity’s global team of more than 250 investment professionals creates value for its portfolio companies through its global platform and depth of expertise in key vertical industries including healthcare, consumer/retail, financial and business services, industrials, and technology, media and telecommunications. Bain Capital Private Equity has 23 offices on four continents. The firm has made primary or add-on investments in more than 1,100 companies since its inception. For more information, visit www.baincapitalprivateequity.com.
About Platinum Equity
Founded in 1995 by Tom Gores, Platinum Equity is a global investment firm with approximately $36 billion of assets under management and a portfolio of approximately 50 operating companies that serve customers around the world. Platinum Equity specializes in mergers, acquisitions and operations – a trademarked strategy it calls M&A&O® – acquiring and operating companies in a broad range of business markets, including manufacturing, distribution, transportation and logistics, equipment rental, metals services, media and entertainment, technology, telecommunications and other industries. Over the past 27 years Platinum Equity has completed more than 350 acquisitions.
