Royal DSM and CVC Capital Partners have announced a partnership for DSM’s activities in Composite Resins and Polymer Intermediates through the formation of a new company, provisionally called NewCo.
The new company, which will have sales of more than $2 billion a year and employ 1,950 employees will be 65% owned by CVC, with DSM having the remaining 35%. The deal will result in DSM recognising a first quarter loss of €130 million but will receive net cash proceeds of over €300 million.
DSM sees the proposed transaction as a logical step into its overall strategy. The company feels that its Composite Resins and Polymer Intermediate activities no longer fit into its portfolio and the partnership with CVC will allow them to fully focus on the Nutrition, Performance Materials and Innovation activities complemented by accelerated actions to reduce costs.
CVC will work with current management of these businesses to make the new company a success. The investment company sees these businesses as a solid platform with leading positions and substantial potential for future growth. As a 35% shareholder in the new business, DSM will be able to benefit from any improvements.