CVC Funds is to acquire up to 30% of Hempel A/S, a move intended to help accelerate Hempel’s long-term growth strategy.
The investment will bring complementary competencies and resources to the paints and coatings manufacturer.
In addition, Hempel says it will benefit from CVC Fund’s experience in making and integrating transformational acquisitions, as the business continues to expand into new segments and geographies.
CVC will subscribe to new shares, equating to a stake of up to 30% in Hempel.
This investment will also strengthen Hempel’s ability to develop new, sustainable technologies and to implement potential acquisition opportunities.
“The Hempel Foundation has been the sole owner of Hempel for 75 years and has an ongoing commitment to secure Hempel’s financial base and ensure its future growth,” said Richard Sand, chair of the Hempel Foundation Board of Directors. “After careful consideration, the Hempel Foundation has decided to welcome a minority investor that brings both unique experience and capital to support Hempel’s accelerated growth journey.
“It is our clear expectation that the company’s value, and therefore the value of the shares belonging to the Hempel Foundation, will increase more over the coming five to ten years with CVC as new minority shareholder than without.”
“This new partnership will considerably strengthen our industry position, will ignite further growth in our winning brands and means we are well-placed to seek out transformative acquisition opportunities.”
Michael Hansen, group president and Hempel CEO
Michael Hansen, group president and Hempel CEO, added: “The competitive landscape is moving at an increasingly faster rate in the paint and coatings industry, and we need to continue to grow to remain at the forefront.
“We have already made solid progress on our strategy of driving profitable growth, both organically and inorganically through M&A activity, delivering record-breaking results in 2023.
“This new partnership will considerably strengthen our industry position, will ignite further growth in our winning brands and means we are well-placed to seek out transformative acquisition opportunities.”
And Michael Lavrysen, partner at CVC, explained that CVC Strategic Opportunities invests in high-quality businesses with long growth horizons.
“Our investment in Hempel aligns perfectly within this strategy, especially the partnership with the Hempel Foundation and we are eager to begin to leverage CVC’s expertise to support the continued success of this world-class business,” he said.
The Hempel Foundation will continue to be the majority shareholder.
The transaction is expected to close in the second half of 2024 and is subject to regulatory approval.
The news comes as Hempel announces it is to divest J.W. Ostendorf and Renaulac.
The prospective new owner, Fidelium Partners, is set to take over the production site in Germany and stores in France, together with around 500 employees and a portfolio of customers.
Hempel acquired the predominantly private label business, J.W. Ostendorf and Renaulac, in 2018.
