Investment fund takes a stake in up-market paint firm
An investment fund has become a minority shareholder in the firm which owns upmarket wallpaper and paint brand Farrow & Ball.
Hempel owns factories, research and developments centres and stock points across the World.
It is best known in the UK for Farrow & Ball which is based in Dorset.
CVC Funds to become a minority investor in Hempel with the aim of accelerating its ambitious growth strategy.
CVC is a global private markets manager with approximately £159m of assets under management and a global network of 29 offices throughout Europe, the Americas and Asia.
The partnership with CVC will support the acceleration of Hempel’s organic growth and value creation plan, such as increasing investment in the development of new, cutting-edge sustainable technologies.
The Hempel Foundation continues to be the majority shareholder in Hempel A/S.
CVC Funds as the minority investor will subscribe to new shares, equating to a stake in Hempel A/S of up to 30% over time.
Richard Sand, chair of the Hempel Foundation Board of Directors said: “The Hempel Foundation has been the sole owner of Hempel for 75 years and has an ongoing commitment to secure Hempel’s financial base and ensure its future growth.
“After careful consideration, the Hempel Foundation has decided to welcome a minority investor that brings both unique experience and capital to support Hempel’s accelerated growth journey. It is our clear expectation that the Company’s value, and therefore the value of the shares belonging to the Hempel Foundation, will increase more over the coming five to ten years with CVC as new minority shareholder than without. This, in turn, will also increase the dividends that the Hempel Foundation receives, strengthening our future opportunities for philanthropic work. I am therefore pleased to welcome CVC to Hempel.
“The competitive landscape is moving at an increasingly faster rate in the paint and coatings industry and we need to continue to grow to remain at the forefront,” says Michael Hansen, group president and chief executive of Hempel A/S.
“We have already made solid progress on our strategy of driving profitable growth, both organically and inorganically through M&A activity, delivering record-breaking results in 2023. This new partnership will considerably strengthen our industry position, will ignite further growth in our winning brands and means we are well-placed to seek out transformative acquisition opportunities.”
Michael Lavrysen, Partner at CVC, commented: “CVC Strategic Opportunities invests in high-quality businesses with longer growth horizons, often partnering with likeminded families and foundations looking for specific expertise to advance expansion. Our investment in Hempel aligns perfectly within this strategy, especially the partnership with the Hempel Foundation and we are eager to begin to leverage CVC’s expertise to support the continued success of this world-class business.”
