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CVC Capital Partners is acquiring a minority stake in Hempel, the Danish owner of upscale British paint maker Farrow & Ball.
According to CVC, the company’s value is more than 25 billion crowns ($3.6 billion) and the Luxembourg-based private equity firm could own up to 30 percent of the company over time.
CVC’s investment is the first time in 75 years that Hempel has had an outside shareholder. The company is owned exclusively by the Hempel Foundation, which was founded in 1948 by coatings industry pioneer JC Hempel, the company said in a statement.
Hempel, based outside Copenhagen, makes paints and coatings for wind turbines and bridges, as well as paints for homes, offices and schools.
The company acquired Farrow & Ball, known for its eccentrically named shades such as “Hog Plum,” “Raw Tomatillo” and “Shallot,” in 2021 from U.S. private equity firm Ares in a deal that brought the paint company with valued at almost £500 million.
Ares bought the company in 2014 for £275 million. It was founded in 1946 by John Farrow and Richard Ball. Farrow, a trained chemist, met Ball, an engineer, at a local clay pit in Dorset. Together they shared a passion for producing rich colors from original formulations using high quality ingredients.
“The Hempel Foundation has been the sole owner of Hempel for 75 years,” Richard Sand, chairman of the Hempel Foundation, said in a statement. “After careful consideration, the Hempel Foundation has decided to welcome a minority investor who brings both unique experience and capital to support Hempel’s accelerated growth trajectory.”
CVC invests through a fund that holds assets for longer than the three to five years that private equity groups typically seek to own the companies in which they invest. The fund’s strategy focuses on companies with a value of more than 1 billion euros and aims to keep them alive for up to 15 years. Further investments included the purchase of a stake in the British roadside assistance provider RAC.
The capital injection will enable Hempel to grow both organically and through the acquisition of new brands.
CVC is one of Europe’s largest private equity groups and manages €186 billion on behalf of investors. The decision to back Hempel adds another well-known brand to its investment portfolio, which also includes Lipton Teas and Infusions as well as shares in the Six Nations rugby tournament and the Spanish football league La Liga.
The company went public on the Amsterdam Stock Exchange late last month, following Swedish private equity firm EQT and U.S. rivals such as Blackstone and Apollo Global Management.