The Hempel Foundation, in agreement with the Hempel A/S (Lyngby, Denmark) Board of Directors, has agreed to invite CVC Funds to become a minority investor. The purpose is to accelerate an ambitious long-term organic and inorganic growth strategy, according to the coating solutions firm.
“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,” says 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,” Sand adds. “It is our clear expectation that the company’s value will increase more over the coming five to 10 years, with CVC as a new minority shareholder, than without. This, in turn, will also increase the dividends that the Hempel Foundation receives, strengthening our future opportunities for philanthropic work.”
The CVC partnership will support the acceleration of Hempel’s organic growth plan, bringing complementary competencies and resources to support its growth and value creation plans. In addition, Hempel will benefit from CVC’s experience in making and integrating transformational acquisitions, all as the business continues to expand into new segments and geographies.
As the minority investor, CVC will subscribe to new share that equate to a stake of up to 30% over time, according to Hempel. This investment will also strengthen the company’s ability to develop new, cutting-edge sustainable technologies for the benefit of customers and to execute potential acquisition opportunities.
“CVC Strategic Opportunities invests in high-quality businesses with longer growth horizons, often partnering with likeminded families and foundations looking for specific expertise to advance expansion,” says Michael Lavrysen, partner at CVC. “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."
In the long run, the mission is to accelerate Hempel’s growth journey towards becoming a leading global company within the paints and coatings industry, according to group officials.
“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,” says Michael Hansen, group president and CEO of Hempel A/S.
“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,” Hansen adds. “This new partnership will considerably strengthen our industry position, ignite further growth in our winning brands, and it means we are well-placed to seek out transformative acquisition opportunities.”
The Hempel Foundation will continue to be the majority shareholder in Hempel A/S. The transaction is expected to close in the second half of 2024, and it is subject to regulatory approval.
Source: Hempel, www.hempel.com.