SNPE Announces Sale Of Isochem

SNPE, the French state-owned industrial conglomerate, is selling its Isochem fine chemicals business to Aurelius, a Munich-based private equity firm, for an undisclosed sum.

Isochem was launched in 1974 and purchased by SNPE in the early 1990s. It operates four manufacturing sites in France as well as a phosgene facility in Kazincbarcika, Hungary. With 530 employees, Isochem had 2009 sales of about $154 million.

"Aurelius is a strong and serious partner for the successful future of Isochem," says SNPE CEO Antoine Gendry. The acquisition will bring the number of companies owned by Aurelius to 15. Isochem will be the German firm's first investment in a chemical company.

Many big European companies rushed into fine chemicals in the 1990s and SNPE is one of the last to get out. The French firm, with a background in jet propellants and explosive materials, has been trying to sell Isochem for nearly 10 years, an endeavor that may have been accelerated by the pending acquisition of SNPE by the French aerospace group Safran. That deal requires Safran to buy all of SNPE.

The sale to Aurelius builds on a trend in Europe of fine chemicals operations being acquired by private equity groups. Rohner, for example, was purchased in 2006 by Arques, another Munich private equity group, and subsequently purchased by Blu-O, a spin-off from Arques. Archimica, Clariant's former fine chemicals division, was purchased by TowerBrook Capital Partners, an Anglo-American venture fund, also in 2006. And International Chemical Investors Group has acquired several European fine chemicals firms, including Italy's Miteni last year.

Xavier Jeanjean, Isochem's sales director, says the deal will be positive for Isochem. "Because Aurelius is family-owned, it will allow us to make quick decisions," he says. "It could dramatically improve the situation we had at SNPE." Because Isochem does not share manufacturing facilities with SNPE, the transition to a new owner will be rapid, he notes.

Aurelius says it plans to invest Isochem's distribution network in the U.S and Eastern Europe. Isochem currently has a U.S. sales office in Princeton, N.J.

The deal should be competed by the end of April, according to Jeanjean. SNPE continues to seek a buyer for its Bergerac nitrocellulose business.