Dire straits

23 July 2018 By Alec Macfarlane

The buyout firm led by Henry Kravis is leading a $1.6 bln takeover of chemicals maker LCY. Taiwan has been a tough market for private equity, including KKR. Slow growth and tensions with China add concerns. As dry powder in the region grows, the risk calculus may be changing.

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A group led by U.S. private equity firm KKR said on July 22 it had agreed to buy LCY Chemical, in a deal that values the Taiwanese specialty chemicals maker at T$47.8 billion ($1.6 billion).

The consortium, which includes LCY employees and members of the company’s founding family, is paying T$56 a share in cash, adjusted to include a dividend of T$2.90 a share.

The offer represents a premium of about 17 percent to LCY's closing price on July 20, the last trading day before the transaction was announced. LCY’s board has unanimously approved the deal.

Goldman Sachs is advising KKR and has agreed to underwrite and arrange debt financing.

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