Dubai International Capital LLC (‘DIC’), the international investment arm of Dubai Holding, today announced that it has agreed to acquire Almatis, the world’s leading producer of specialty alumina from funds controlled by Rhône Capital L.L.C. and Teachers’ Private Capital, the private investment arm of the Ontario Teachers’ Pension Plan (“OTPP”). Dubai International Capital will retain the existing management team and further support the global growth strategy pursued by Almatis.
Sameer Al Ansari, Executive Chairman and Chief Executive Officer of Dubai International Capital said “We are delighted to be making this announcement today. Almatis is the global leader for specialty alumina and has a robust brand associated with the highest product quality and reliability. We view this acquisition as an important milestone in the evolution of Dubai International Capital Private Equity, as it demonstrates our ability to operate even in the most challenging mergers and acquisitions and credit market conditions and reinforces our position as a partner of choice for private equity owners and management teams alike.”
Almatis, headquartered in Frankfurt, Germany, is the global leader in the research, development and production of specialty alumina materials used in various industrial manufacturing processes such as steel refractories, ceramics and flame retardants. Its modern global manufacturing capability spans three continents, with eight manufacturing facilities in Germany, the Netherlands, the United States, Japan, China and India, and employing over 900 people.
The company expects to grow its presence in China, Russia, India, Brazil and the Middle East. Almatis has already launched an expansion programme to raise its global capacity by almost 20% to around 750,000 tons by 2010. The company’s growth prospects are robust, as the majority of future growth in the alumina refractory market is driven by global steel volumes produced. Global production of steel is expected to grow at a Compound Annual Growth Rate (CAGR) of 5% from 2006 to 2012 and most of the growth is anticipated to come from the Middle East and Asia, whereas China alone is forecast to grow at a CAGR of at least 10%. Almatis is the only producer in China, having established manufacturing operations since 2001, which were recently significantly expanded. The company is already looking to further expand capacity to consolidate its presence in that market.
Commenting on the deal, Sylvain C. Denis, Chief Executive Officer of Dubai International Capital Private Equity said “Almatis possesses all the qualities that we seek in pursuing our private equity investment strategy. It is a market leader in a growing industry, with strong management and good business fundamentals. It is an industry that we understand well and offers an exciting emerging market growth opportunity. We will be working closely with Almatis’ management team, under the leadership of Martin Laudenbach, to realise the Company’s potential for growth and expansion across product categories, as well as new geographic markets, such as the Middle East and Asia”.
Martin Laudenbach, Chief Executive of Almatis, said: “We are excited about Dubai International Capital’s decision to invest in Almatis. After almost 4 years of highly successful growth under the ownership of Rhône Capital and Ontario Teachers Pension Plan, DIC’s decision marks the beginning of the next phase in the development of Almatis. The support and commitment of DIC will allow us to continue our successful growth strategy, significantly expanding our global capacity, moving into emerging markets and providing our customers with high-performance alumina specialties around the world.”
Acquiring Almatis is another important phase of expanding Dubai International Capital’s international portfolio of diverse assets which vary from investments in the entertainment, automotive, industrials and hospitality sectors.
The sale and purchase agreement is conditional upon receipt of all appropriate anti-trust and other regulatory approvals.
