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Skadden, Kirkland Steer $3.2B Diversey Sale to Bain

Skadden-guided Bubble wrap maker Sealed Air Corp. has agreed to sell cleaning and chemicals systems business Diversey, as well as part of its food care unit, to Kirkland-counseled Bain Capital Private Equity in a deal worth roughly $3.2 billion, the companies said Monday.

The transaction confirms rumors from mid-March that the two companies were in exclusive talks about a deal involving Sealed Air’s Diversey Care business. Under the terms of the agreement, Bain Capital will pick up that business and the food hygiene and cleaning business within Sealed Air’s Food Care division, according to a statement.

Together, the businesses Bain Capital is acquiring generated net sales of around $2.6 billion in 2016. The so-called New Diversey will employ about 8,600 people.

“Diversey has a long track record of leadership in the hygiene and cleaning solutions market on a global basis,” Ken Hanau, a managing director at Bain Capital Private Equity, said in a statement. “We are excited to partner with the talented team at Diversey to grow across key market verticals and geographies while investing in innovative hygiene solutions.”

“Bain Capital’s integrated global platform and strong growth orientation are well aligned with the strategic vision for Diversey,” Hanau added.

For Sealed Air, the sale allows the company to refocus efforts on its Food Care and Product Care divisions. The company intends to use proceeds from the divestiture for a number of purposes, including paying down debt and funding potential acquisitions.

Jerome A. Peribere, president and CEO of Sealed Air, said in a statement that the company is “pleased that New Diversey has a strong partner to support future growth initiatives and drive further expansion.”

“Diversey Care and its related hygiene business has built an impressive innovation pipeline that includes the Internet of Clean, robotics and AHP disinfection technologies, revamped its go-to-market strategy and significantly improved profitability,” Peribere said. “New Sealed Air, a leading provider of food, product and medical packaging solutions, will continue to focus on accelerating profitable growth and generating strong cash flow through end market opportunities and the global adoption of new products and solutions.”

The deal, which is subject to relevant regulatory approvals and other customary closing conditions, is expected to close during the second half of this year.

Sealed Air acquired Diversey in the summer of 2011 in a deal worth $2.9 billion.

Citi is acting as financial adviser to Sealed Air, with Skadden Arps Slate Meagher & Flom LLP serving as legal adviser.

The Skadden team includes mergers and acquisitions partners Robert Pincus and Allison Land and associates Andrew Carriker and Vincent Cannizzaro, tax partners Diana Lopo and Gavin White and associate Joseph Soltis, intellectual property and technology partner Bruce Goldner, antitrust partner Kenneth Schwartz, executive compensation and employee benefits partner Regina Olshan and associate Audrey Murga, labor partner David Schwartz, and banking partner Steven Messina.

Barclays and RBC Capital Markets LLC are serving as financial advisers to Bain Capital, with Kirkland & Ellis LLP acting as legal adviser.

Kirkland’s international team was led by Chicago corporate partners Neal Reenan and Ian Bushner and associates Ryan Jackson, Peter Anderson, Susan Tanaka, Matt O’Hare and Kwangwoo Kim; New York corporate partners Chris Torrente and Adele Maloney Thomas and associate Andy Fleischman; and London corporate associate Ian Kirwan. The firm’s debt finance team was led by partners Michelle Kilkenney and Katie Bolanowski and associate Aaron Berlin; partners Gregory Gallagher and Mike Carew and associate Miles Johnson led the tax team; and the technology and IP transactions team was led by partners Jeffery Norman and Vladimir Khodosh and associates Ryan Farrell, Shatra Bell and Kevin Jacobsen.

Credit Suisse and Goldman Sachs together with Barclays, BofA Merrill Lynch, HSBC, RBC Capital Markets and SunTrust Robinson Humphrey are providing committed financing for the transaction.

A Shearman & Sterling LLP team led by John A. Marzulli Jr. and featuring Alan Sun advised Citi.

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