CCMP acquires Linde's components business

CCMP pays $899 million for the business and claims future growth in Asia is a key driver of the deal.
CCMP Capital, through its affiliates CCMP Capital Advisors and CCMP Capital Asia, has acquired the components business of the Linde Group subsidiary, BOC Edwards for Ç685 million ($898.6 million). The potential in Asia is a primary reason for the acquisition and for the deal structure which incorporates Linde sharing in future upside.

The components business, comprising vacuum pumps and semiconductor components, has customers across industries including semiconductor, flat panel display, chemical, pharmaceutical and others. Linde acquired the business pursuant to an acquisition of the BOC group in 2006. At the time, Linde had indicated that it intended to focus on the industrial gases and engineering businesses of BOC and would review strategic options for the divestiture of certain businesses including the components business.

John Lewis from CCMP Capital Asia says: ôBOC Edwards is an outstanding business with a rapidly growing Asian customer base, including leading semiconductor companies and equipment manufacturers in Greater China, Korea, Japan and Singapore. We will support management to help BOC Edwards get closer to their fast-growing Asian customer base.ö

Linde has negotiated a share of future earnings as part of the agreement. As per the agreement, the seller has retained the right to participate in future value creation. If CCMP Capital successfully develops the business and subsequently exits its investment - whether through an IPO or a trade sale to a strategic investor - Linde is entitled to an additional payment equivalent to up to Ç65 million.

The components business has 4,000 employees worldwide. In fiscal 2006, the company had a turnover of Ç860 million. At the base price of Ç685 million this represents a price-to-turnover multiple of 0.80 times and at the ceiling of Ç750 million, including the additional payout, it represents a multiple of 0.87.

The deal is subject to regulatory approvals and customary closing conditions, which are expected to be completed by June.

CCMP Capital Advisors has invested $10 billion in over 375 buyout and growth equity transactions since 1984. Prior to forming CCMP Capital, the firm's principals led the buyout and growth equity business of JPMorgan Partners. CCMP Capital Asia was founded in 1999 and has $2.7 billion of capital under management. It has led leveraged buyouts in Australia, China, Japan, Korea and Singapore investing $1.6 billion in 24 companies.

Deutsche Bank, Lehman Brothers, Barclays and The Royal Bank of Scotland are financing the deal. Lehman Brothers is the exclusive M&A advisor to CCMP Capital.
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