Clayton, Dubilier & Rice to Acquire U.S.-Based Laboratory Supplies Distributor from Merck KGaA for US$1.65 Billion
Transaction Creates Stand-Alone Industry Leader Positioned for Growth
NEW YORK, 16 Feb. (PRNewswire) -
Clayton, Dubilier & Rice, Inc. (CD&R), a leading global private equity firm, today announced that it has reached a definitive agreement with Merck KGaA regarding the purchase of VWR International for US$1.65 billion.
VWR, based in West Chester, Pennsylvania, is a leading distributor in North America and Europe of laboratory supplies to the industrial, pharmaceutical, educational and government markets. The company has 5,880 employees worldwide and 2003 revenues of approximately US$2.8 billion, of which approximately two thirds are from North America and the remainder from Europe. Sales in 2003 under U.S. GAAP increased approximately 6% over 2002.
"VWR is a very high quality business and the transaction is precisely the kind for which we are well known -- a large divestiture of a captive distributor from a major multinational corporation," said Donald J. Gogel, Chief Executive Officer of CD&R. "Our operationally focused investment model is particularly well suited in divestiture situations where the parent organisation has a strong interest in seeing its former unit grow and prosper."
VWR will continue to distribute Merck laboratory products.
The roots of VWR in the United States go back to 1852 when John Taylor founded a druggist and chemist glassware business in Sacramento, California to serve assayers in the California gold rush. Merck KGaA purchased an initial 15% stake in what was by then VWR Scientific Products Corp. in 1995 and acquired the rest of the business in 1999.
"We feel this agreement is a win-win for all three companies," said Merck KGaA Chief Executive Officer Bernhard Scheuble. "Clayton, Dubilier & Rice has a track record helping to build and grow successful global distribution businesses, so VWR should continue to prosper and remain an outstanding partner for us. For Merck, this cash infusion will make us almost free of financial debt and allow us to expand in our core businesses."
"As an independent company we will be more committed than ever to provide our valued customers with the highest quality products and services," said Walter W. Zywottek, Chief Executive Officer of VWR. "We look forward to working with Clayton, Dubilier & Rice to build on our culture of excellence to take the company to the next level of profitable growth."
"VWR has an extensive network of distribution centers in the U.S., long-standing relationships with the world's leading pharmaceutical companies, and the industry's strongest footprint in Europe," said Richard J. Schnall, a CD&R partner involved in the transaction. "We have successfully invested in distribution businesses and will utilise that experience as we work closely with Walter Zywottek and his management team to accelerate VWR's growth." The transaction is subject to normal regulatory approvals and is expected to close by April.
About Clayton, Dubilier & Rice
Clayton, Dubilier & Rice, Inc. is a leading private equity investment firm that has earned consistent, superior investment returns using an integrated operational and financial approach to build and grow portfolio businesses. Half of the firm's partners are seasoned corporate executives from major industrial enterprises and half come from mergers and acquisitions, financing or investment backgrounds. Since its founding in 1978, CD&R has managed the investment of over US$4.5 billion in 36 businesses -- mostly subsidiaries or divisions of large multi-business corporations -- representing a broad range of industries with an aggregate transaction value in excess of US$19 billion and revenues of more than US$25 billion. The firm has offices in New York and London. For more information about CD&R, visit www.cdr-inc.com.
About VWR International, Inc.
VWR International is a global leader in the distribution of scientific supplies, with worldwide sales of more than US$2.7 billion. VWR International's business is highly diversified across a spectrum of products and services, customer groups and geography. The company offers more than 750,000 products, from more than 5,000 manufacturers, to over 250,000 customers throughout North America and Europe. VWR International's primary customers work in the pharmaceutical, life science, chemical, technology, food processing and consumer product industries. Other important customers include universities and research institutes; governmental agencies; environmental testing organisations; and primary and secondary schools. VWR International affiliates operate in 18 countries and employ nearly 6,000 people. The company's mission is to deliver excellence in the distribution of scientific supplies. The VWR International Group is headquartered in West Chester, Pennsylvania. For more information, visit www.vwr.com.
About Merck KGaA
Merck is a global pharmaceutical and chemical company with sales of EUR 7.2 billion, a history that began in 1668, and a future shaped by 34,200 employees in 53 countries. Its success is characterised by innovations from our entrepreneurial employees. Merck's operating activities come under the umbrella of Merck KGaA, in which the Merck family holds a 74% interest and free shareholders own the remaining 26%. The former U.S. subsidiary, Merck & Co., has been completely independent of the Merck Group since 1917. For more information, visit www.merck.de.
Source: Clayton, Dubilier & Rice
CONTACT: Tobias Weitzel, tel +1 215 481 2214; Philip Gawith, tel +1 207 379 5151; Thomas C. Franco, tel +1 212 232 2220, all of Broadgate Consultants Inc., for Clayton, Dubilier & Rice; Phyllis Carter, tel +49 6151 72 7144; Juergen Knackmuss, tel +49 6151 72 2578, both for Merck KGaA
Web site: http://www.cdr-inc.com
http://www.vwr.com
http://www.merck.de
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