* Deal values Flint at more than 2.2 billion euros - sources
* Flint's debt to be cut by 20 pct in transaction - sources
* Flint to look at buying peers in coming years - sources
(Adds CVC made money on Flint investment)
FRANKFURT, April 10 Koch Industries
and Goldman Sachs' private equity arm are acquiring one
of the world's leading makers of printing-inks, Flint, from
buyout group CVC, the four companies said in a joint
statement on Thursday.
The deal values Flint at more than 2.2 billion euros ($3
billion) and will cut its debt, enabling it to acquire
competitors in coming years, two people familiar with the
"We want to grow Flint organically, but also with
acquisitions and already have a list of potential takeover
targets," said Martin Hintze, Goldman Sachs's co-head of
Corporate Equity Investing in Europe.
The Luxembourg-based group makes just over half of its
profit in the packaging industry, while inks for the printing
industry account for the rest.
As demand for ink to print newspapers and magazines
declines, the new owners want to shift Flint's focus
increasingly towards packaging.
Koch, which is one of the largest privately held companies
in the United States, and Goldman Sachs have agreed to reduce
Flint's debt by 20 percent from the current roughly 1.8 billion
euros and have secured better terms for the remaining debt,
In 2013 Flint, which has roughly 6,600 staff and has annual
sales of 2.2 billion euros, saw earnings before interest, taxes,
depreciation and amortization rise by 5 percent to about 325
Flint's two biggest rivals are Sun Chemical, owned by
Dainippon Ink & Chemicals, and Germany's Siegwerk
The sale comes after several unsuccessful attempts by CVC to
sell the company over the last couple of years.
In 2010 CVC unsuccessfully tried to list Flint, having built
up the company by combining ink businesses bought from BASF
and Akzo Nobel in 2004 and a year later
merging it with U.S.-based Flint Ink Corporation.
About a year ago, Goldman and Koch started working on a
potential Flint acquisition and eventually entered exclusive
negotiations with CVC, two people familiar with the transaction
said. No formal auction process was ever launched because CVC
had assessed the offer price as being attractive, they added.
CVC's return on the Flint investment is in line with the
buyout group's average profit it makes when buying and selling
companies, another person familiar with the deal said.
CVC already got its initial investment back plus made some
money from it in 2006 when it paid itself a dividend following a
500 million euro recapitalisation of Flint.
Banks have lined up 1.7 billion euros of debt financing to
back Kock and Goldman's acquisition of Flint, banking sources
Deutsche Bank, Morgan Stanley, Barclays and Goldman Sachs
are leading the all-loan financing which will include a term
loan B, second line tranche and revolving credit facility,
denominated in euros and dollars, the banking sources said.
The financing is expected to launch for syndication to
investors next week with bank meetings taking place after
Easter, they added.
Loans in Flint traded lower on Europe's secondary loan
market and wrapped around par on Thursday in anticipation of the
sale which will repay loans at 100. They had been trading at
around 100.5 prior to that.
($1 = 0.7234 Euros)
(Reporting by Arno Schuetze and Alexander Hübner; additional
reporting by Claire Ruckin in London; Editing by Erica