Leverkusen, Germany – Covestro AG will sell its European Systems House business to the US private equity and alternative assets investment firm HIG Capital in a move to streamline its business.
The system houses are part of Covestro’s polyurethanes segment and offer tailor-made polyurethanes systems for customers.
The European Systems Houses business has facilities in the Netherlands, Denmark, Spain, Germany and Italy.
The business has approximately 250 employees and generates annual sales of €230 million ($258.5 million).
Proceeds for the sale will be in “high-double-digit euro million range,” according to a June 17 statement by Covestro.
The company expects to close the deal in the second half of the year.
The move was part of the company’s “portfolio optimisation” with focus on future growth and value creation, said chief financial officer Thomas Toepfer said.
“In an advanced polyurethanes market like Europe we focus on a more centralised approach to efficiently address the needs of our customers,” he added.
Covestro will continue to have strong ties with the systems houses as a key polyurethane supplier.
Under the new ownership, Covestro expects the business unit to position itself as an independent, focused player for midsized customers.
With focus on small and midsized businesses, HIG says it has a buy-and-build approach towards its investments.
The company, according to Covestro, intends to further develop its pan-European presence and to build a strong and independent European group of polyurethane systems houses.
The current management team will continue to run the business after the sale.