Diversey Acquisition: Key Details, Impact, and What Comes Next

Solenis has successfully acquired Diversey for $4.6 billion, marking a significant consolidation in the industry. This strategic merger combines two leaders in complementary markets, enhancing Solenis' capabilities in water management, cleaning, and hygiene. The acquisition is poised to broaden the company's global reach and offer comprehensive solutions to address sustainability challenges.

What Is Diversey?

Founded over a century ago in Chicago, Diversey specializes in providing a wide range of cleaning and hygiene solutions. Its core products include building care, floor care, infection prevention, and kitchen care, among others. Diversey differentiates itself through its commitment to sustainability, global reach in 130 countries, and innovative, value-driven solutions. The company focuses on increasing operational efficiency and offers comprehensive solutions tailored to various industry sectors, ensuring optimal hygiene and infection prevention.

Who Acquired Diversey?

Solenis is a prominent specialty chemical supplier known for its focus on sustainability and operational efficiency. The company offers a wide range of solutions, including water treatment, commercial cleaning, and industrial processing aids. Serving diverse markets such as food and beverage processing, pulp and paper, and pool and spa, Solenis is recognized as a leader in the industry. Its commitment to innovation and corporate social responsibility has earned it multiple awards and a strong market position.

When Was Diversey Acquired?

Solenis completed its acquisition of Diversey on July 5, 2023. This strategic move aligns with industry trends towards consolidation and diversification in the specialty chemicals and hygiene sectors. The timing is significant as it follows Solenis' acquisition by Platinum Equity in 2021 and reflects a broader industry focus on sustainability and integrated solutions. The merger aims to enhance Solenis' global reach and address critical challenges in water management, cleaning, and hygiene.

Why Was Diversey Acquired?

Market Expansion

• The acquisition allows Solenis to operate in over 130 countries with 71 manufacturing facilities and more than 15,000 employees. This expanded footprint enables the company to serve a broader customer base and enter new markets.
• The merger creates cross-selling opportunities and enhances capabilities to help customers tackle sustainability challenges, reduce environmental impact, and create a cleaner, safer world.

Technology Integration

• The addition of Diversey's line of cleaning and hygiene products and technologies to Solenis' portfolio creates significant cross-selling opportunities. This integration enhances Solenis' ability to offer comprehensive solutions to its customers.
• The combined company will leverage state-of-the-art monitoring, control, and delivery systems to improve operational efficiencies, enhance product quality, and protect plant assets. This technological synergy is expected to minimize environmental impact and create cleaner, safer environments.

Competitive Advantage

• The merger makes Solenis a more diversified company with significantly increased scale and broader global reach. This strategic combination allows the company to offer a 'one-stop shop' suite of solutions that meet customer demand and address water management, cleaning, and hygiene issues globally.
• Enhanced capabilities to help customers tackle critical sustainability challenges and reduce their environmental impact provide Solenis with a competitive edge. Strong customer partnerships, leading-edge innovation, and value-added services are expected to propel Solenis' aggressive growth trajectory.

Acquisition Terms

• Acquisition Price: $4.6 billion
• Payment Method: All-cash transaction
• Key Conditions or Agreements:
  • Bain Capital, the majority shareholder of Diversey, will hold a minority stake in Solenis as a result of the transaction.
  • The transaction is subject to the approval of Diversey shareholders holding a majority of the outstanding shares and receipt of regulatory approvals.
  • Diversey shareholders (other than those affiliated with Bain Capital) will receive $8.40 per share in cash.
  • Bain Capital will receive $7.84 per share in cash and will roll over a portion of its shares into an affiliate of Solenis in exchange for common and preferred units of such affiliate.
  • The merger is expected to be completed in the second half of 2023.
  • Upon completion of the merger, Diversey will become a private company, and its ordinary shares will no longer be listed on any public market.

Impact on Diversey

The acquisition of Diversey by Solenis has led to significant changes in operations and management. Diversey will become a private company, and Solenis CEO John Panichella will lead the combined entity. The merger expands Solenis' operational scale, now operating in over 130 countries with 71 manufacturing facilities and more than 15,000 employees. Bain Capital, the majority shareholder of Diversey, will hold a minority stake in Solenis, indicating a shift in ownership structure. This strategic move aims to enhance the company's global reach and operational efficiency.

The merger has also impacted Diversey's product offerings and services. The combined company will now offer a comprehensive suite of solutions, including Diversey's hygiene, infection prevention, and cleaning products. This integration creates cross-selling opportunities and enhances Solenis' capabilities to address water management, cleaning, and hygiene issues globally. While specific employee and customer reactions are not detailed, the merger is expected to make Solenis a more valuable partner by offering enhanced capabilities and a broader range of solutions.

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