Azelis share acquisition deal agreed

15 December 2006

Dianne Nott

Azelis, Europe’s fastest growing distributor of specialty chemicals, polymers and related services, has agreed a change of share ownership with 3i, a leading global finance house.

Previous equity partner Cognetas, formerly Electra Partners Europe, had acquired 57% of the shares in Azelis in November 2003 with the balance remaining in the hands of the original executive management investors. Cognetas provided funding support during the primary growth by acquisition phase which has seen Azelis virtually complete its geographic European coverage and increase its turnover from €348 million in 2003 to around €900 million by the end of 2006.

Azelis CEO Dr Udo Wenzel said: “We have grown faster than anticipated and earlier this year began the process of identifying a suitable partner to support us over the next five years which will be the lead up to possible flotation. We believe that 3i is the ideal partner for the next phase of international growth of Azelis. This is for three reasons: their international presence, their experience and knowledge of the chemical distribution sector and the pragmatic and hands-on way to work with their managingt partners. 3i are fully supportive of our development plans.
Our strategic direction remains the same and means we will continue with our targeted acquisition programme and further develop synergies for organic growth within the group. The current management team remains in place and substantially increased its investment in Azelis through an attractive share purchase agreement with our new partner.”

Marco Fumagalli, General Manager of 3i Italy commented, - "we are very satisfied with our investment in Azelis - because it is a company that it is known to have built a leading position in its field, based on its top quality leadership and management. These elements stimulated the interest of 3i to conclude the investment, and it fits well with our portfolio and network of international contacts. We plan to continue to support the strategy of growth and consolidation of the company at the international level and also via strategically targeted acquisitions."

Following the investment, 3i has selected a non-executive chairman, Andrew H.Simon, a manager with the substantial experience in the chemical field, and will install on the board two non-executive directors, David Osborne and Lorenzo Salieri, Partners of 3i Italy and UK.

The deal is subject to European Merger Clearance which is expected to be received by the end of January 2007.