CVC Capital Partners is acquiring a minority stake in the Danish company Hempel, the owner of the prestigious British paint brand Farrow & Ball. The deal, valued at more than DKr25bn ($3.6bn), will see CVC potentially owning up to 30% of the business over time. This marks the first time in 75 years that Hempel has had an external shareholder, as it has been solely owned by the Hempel Foundation since its inception in 1948. Hempel produces paints and coatings for various uses, including wind turbines, bridges, and residential buildings.
The acquisition of Farrow & Ball in 2021 added significant value to Hempel, with the paint company being known for its unique and creatively named hues. Previously owned by US private equity firm Ares, Farrow & Ball was founded in 1946 by John Farrow and Richard Ball, who shared a passion for creating rich colors using high-quality ingredients. The Hempel Foundation has decided to bring in a minority investor to help accelerate Hempel’s growth journey through capital and expertise, after careful consideration.
CVC’s investment in Hempel is made through a fund that focuses on long-term ownership of companies worth more than €1bn, with a strategy to hold assets for up to 15 years. This differs from the typical private equity model that seeks to exit investments within three to five years. The additional capital infusion will enable Hempel to expand both organically and through acquiring new brands, further enhancing its position in the market. CVC is a major European private equity player managing €186bn in investor assets, with a diverse portfolio that includes well-known brands like Lipton Teas and Infusions.
Hempel’s decision to welcome outside investment comes as the company aims to boost its growth and presence in the market, leveraging the experience and capital that CVC Capital Partners can bring to the table. The partnership between Hempel and CVC adds another prestigious brand to the private equity group’s impressive portfolio of investments, which spans various sectors including sports and consumer goods. This strategic move aligns with CVC’s commitment to long-term investments in established companies with strong growth potential, such as Hempel.
By going public on the Amsterdam Stock Exchange, Hempel has opened up new opportunities for growth and expansion, following in the footsteps of other private equity-backed companies. The move to bring in external investment from CVC reflects the company’s ambitions to further strengthen its position in the market and continue its legacy of innovation and quality. With CVC’s support, Hempel is well-positioned to capitalize on new growth opportunities and solidify its presence as a leading player in the paints and coatings industry.
