NewCo will be 65% owned by CVC and 35% by DSM, and will employ 1,950 workers. In 2014 the pro-forma third-party sales of NewCo amounted to EUR 2.1 billion with a 2014 EBITDA of EUR 106 million.

The financing of the new company will primarily be through an equity contribution, third party financing and a EUR 100 million loan provided by DSM.

Independent and dedicated

“This proposed transaction delivers on the strategic actions DSM announced for these businesses in November 2014 and is a decisive step in further optimizing our portfolio and reducing our cyclicality,” said Feike Sijbesma, Chief Executive Officer and Chairman of the Managing Board of Royal DSM.

“We have found a good partner in CVC after a careful process in which we evaluated all options. We believe the partnership with CVC is the best way forward for these businesses. NewCo will operate as an independent, dedicated company under the leadership of CVC. DSM can now focus fully on improving the operational performance of its Nutrition and Performance Materials businesses as well as benefitting from the future value creation in this new venture.”

“This transaction is geared towards value creation for these businesses and is consistent with our commitment to continue to generate value for our stakeholders and deliver on our strategy.”

Experience and expertise

“We are excited about partnering with DSM and bringing our experience and expertise to bear to further leverage the leading market positions of the businesses,” commented Steven Buyse, Partner at CVC Capital Partners.

“We look forward to working with such a dedicated and talented group of employees to build on the strong existing customer base and create value for all of our stakeholders.”

Strategy

For DSM, this proposed transaction is a logical step in the execution of its strategy as polymer intermediates (caprolactam, acrylonitrile) and composite resins no longer fit with its more resilient portfolio in nutrition and performance materials.

The partnership with CVC allows DSM to further reduce the cyclicality of its portfolio, secure a long-term competitive supply position of caprolactam for DSM Engineering Plastics and fully focus on the nutrition, performance materials and innovation activities complemented by accelerated actions to improve efficiencies and reduce costs.

Securing competitive position

As a 35% shareholder in NewCo, DSM will be able to benefit from any improvements in the businesses that will become part of NewCo. NewCo will operate as an independent company with three business units: caprolactam, acrylonitrile and composite resins.

NewCo will continue to supply at least 80% of DSM Engineering Plastics' caprolactam needs in Europe and North America for the coming 15 years via a drawing rights contract, effectively maintaining DSM Engineering Plastics' backward integration.

In China DSM Engineering Plastics will continue to be supplied by NewCo as today, securing an ongoing strategic and competitive position for the polyamide 6 business.

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