Jarden’s Franklin May Buy MacDermid to Enter ChemicalsAndrew Noel
Martin Franklin, who co-founded consumer goods company Jarden Corp., is in talks to buy MacDermid Inc. to diversify into specialty chemicals used in electronics and printing products.
Franklin is offering about $1.8 billion, said two people familiar with the matter, declining to be identified as the talks are not public. London-listed investment company Platform Acquisition Holdings, through which Franklin would make the purchase, said in a statement today that the talks are ongoing. Platform declined to comment on the potential purchase price. MacDermid couldn’t immediately be reached for comment.
“A further announcement will be made in due course as appropriate,” Platform said. Shares of the London-listed company have been temporarily suspended until talks are concluded or abandoned.
MacDermid is expected to be the first of a string of niche chemical makers targeted by Franklin, the Wall Street Journal reported earlier today. British-born Franklin and investor Nicolas Bergruen listed Platform in London earlier this year, attracting Bill Ackman’s Pershing Square Capital Management and Blackrock Inc. as investors with its aim of targeting niche businesses for as much as $2.5 billion.
The MacDermid deal may be finalized within two months, one of the people said.
The Denver-based chemical maker was bought out by management in 2007, and hired Lazard to explore sale options after a failed attempt at an initial public offering. It supplies surface coatings used in the interior of car parts as well as chemical solutions used in offshore drilling, a current acquisition hotspot in the industry.
MacDermid has a margin based on earnings before interest, taxes, depreciation and amortization of about 25 percent, and the purchase price is about 12 times profit, said one of the people.
Solvay SA of Belgium earlier this week agreed to buy U.S. producer Chemlogics for $1.3 billion in cash to expand its offering of chemicals for the oil and gas industry.
MacDermid’s main galvanizing and electroplating business competes with Outotec Oyj of Finland and Alent Plc of the U.K. In printing ink ingredients, it competes with CVC Capital Partners Ltd.’s Flint Group, whose sale stalled last year after initially attracting Bain Capital Partners LLC, Apollo Global Management LLC and Carlyle Group LP.
Franklin built Jarden via acquisitions into a household-goods company spanning 130 brands ranging from Ball canning jars to Yankee candles and Diamond matches. The purchase of American Household transformed the company into a global company with brands such as outdoor equipment maker Coleman.
Shares of the U.S. company have added 36 percent this year, giving the company a market value of $6 billion.