Date: Dec 09, 2014 Author: Kaitlyn Kiernan Source: Law360 (
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New York (December 09, 2014, 6:14 PM ET) -- Private equity groups the Carlyle Group LP and Unison Capital Group said late Monday that they agreed to sell Japanese engineered ceramics manufacturer Covalent Materials Corp. to CoorsTek Inc. for an undisclosed amount after eight years of management.
Privately owned CoorsTek is picking up Tokyo-based Covalent as it continues a slew of acquisitions to expand its product offerings and its footprint in Asia. This latest deal will leave it as the world's largest engineered ceramics manufacturer, according to a statement.
"CoorsTek has known Covalent ... for many decades and has always had great respect for their materials expertise, product quality and innovation," Dr. John Coors, CoorsTek's chairman, president, and chief executive officer, said in a statement. "The opportunity to combine the engineering knowhow, manufacturing capabilities and reputation Covalent has developed over the past 96 years with what CoorsTek has developed over the past 104 represents a significant industry milestone."
Under the terms of the deal, Carlyle and Unison will transfer all of their interest in Covalent — 95.2 percent of the company in all — to CoorsTek on Dec. 26, and they are asking all other Covalent shareholders to do the same.
Earlier this year it was reported that Carlyle and Unison were seeking a price of 50 billion yen, which was then about $489 million, but now closer to $418 million given a recent simultaneous weakening of the yen and strengthening of the dollar that sent the Asian currency's value relative to the dollar to its lowest level in more than seven years.
Covalent said it will redeem all its outstanding bonds — about 23.53 billion yen ($196.8 million) as of the end of September — by Feb. 18.
Covalent had net sales of 16.2 billion yen ($135.5 million) and net income of 1.78 billion yen in the six month period from April through September, according to a statement last month.
CoorsTek began in late 1910 as a oven-safe cookware company known as Herold China and Pottery Co. By the late 1950s, the company had expanded its operations into a number of spaces, including brewing and the creation of ceramic armor plates and nose cones for military applications, and invented the world's first seamless aluminum can.
In 1992, CoorsTek was spun off from what was then known as Adolph Coors Brewing Company and what is now Molson Coors Brewing Company.
In the past decade, the company, which now makes advanced technical ceramics, precision-machines metals and engineered plastics, has expanded rapidly through a number of acquisitions, including buyouts of Gaiser Tool Co. in 2007, Ceramatec in 2009 and the technical ceramics division of BAE Systems in 2011.
Carlyle and Unison acquired Covalent, then known as Toshiba Ceramics Co., in 2006 in a deal that valued the company at $774 million. The private equity groups later spun off the company's silicon-wafer business to Sino-American Silicon Products Inc. in 2012 for $455 million.
KPMG advised CoorsTek on the transaction, while Nomura Holdings Inc. advised Carlyle and Unison.
