New Mountain Capital to buy cleaning products maker Zep Inc for $692 mn
08 Apr 2015
US private equity firm New Mountain Capital today struck a deal to buy Zep Inc, a maker of maintenance and cleaning chemicals, for $692 million, including debt.
Under the deal that has been unanimously approved by Zep's board, Mountain Capital is offering to pay $20.05 per share, a 17 per cent premium to Zep's Tuesday closing price.
The agreement contains a go-shop provision under which Zep may solicit alternative proposals from third parties during the next 30 days.
With 2014 revenues of around $700 million, Zep is a consumable chemical packaged goods company selling a variety of high-performance chemicals that help clean, maintain and protect.
Around 61 per cent of its revenue comes from the transportation market and the industrial maintenance and repair operation market with the balance derived from sales into the facilities maintenance vertical.
The Atlanta, Georgia-based company markets its products and services under brand names, such as Zep, Zep Commercial, Zep Professional, Zep Automotive, Enforcer, Misty, TimeMist, TimeWick, Country Vet, and others as well as a number of private label brands.
''During the past year, we conducted a thorough review of strategic opportunities to enhance value for all stakeholders, and we are pleased to have reached this agreement, which we believe delivers immediate and substantial cash value to our stockholders,'' said John Morgan, chairman, president and CEO of Zep Inc.
''Zep Inc. is an industry leader with significant growth potential and fits perfectly with New Mountain Capital's investment philosophy of investing in market leaders in sustainable growth industries,'' said Matthew Holt, managing director of New Mountain Capital.
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