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CD&R To Buy Bodycote Business Unit
Bodycote Testing Group, a subsidiary of Bodycote plc, will be led by a former ABB exec.
August 28, 2008
Clayton, Dubilier & Rice (CD&R) has agreed to acquire Bodycote Testing Group (BTG), the materials testing business unit of thermal processing company Bodycote plc, for about £417 million.
CD&R, a private equity firm headquartered in New York, has placed its hopes for BTG in Fred Kindle, the former president and chief executive of ABB Ltd. He joined CD&R in June as an operating partner and has been named chairman of BTG. Under Kindle, ABB staged a dramatic turnaround effort following the company’s botched acquisition strategy of the mid 90s.
BTG provides quality control and specification compliance services to industrial businesses. CD&R has a long history of acquiring multi-location service businesses. In April 2005, the firm, in partnership with French buyout firm Eurazeo and Merrill Lynch Global Private Equity acquired Rexel SA, a electrical parts and supplies distributor. In September 2005, CD&R, along with The Carlyle Group and Merrill Lynch Global Private Equity, acquired The Hertz Corporation. Both acquisitions, like BTG, were multi-location service businesses.
A person familiar with the firm noted that additional add-on acquisitions are “definitely likely to be the case.”
Kindle said, “We look forward to working with the BTG team to build on the core strengths of the business and create an even stronger, more profitable enterprise that is positioned for sustainable, long-term growth.”
Donald J. Gogel, president and chief executive officer of CD&R, said, “Our ability to execute this transaction in the current environment reflects the flexibility of CD&R’s operating model; and the acquisition of such a geographically diversified business, headquartered in Europe, is a validation of our global approach.”
CD&R expects the transaction to close by October of this year.
In April, CD&R hired Edward M. Liddy, former chairman and chief executive officer of The Allstate Corporation as a partner.
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