Announced earlier this year, Solenis has formally acquired Diversey in an all-cash transaction valued at $4.6 billion.
Headquartered in Wilmington, Del., Solenis is a global manufacturer of specialty chemicals used in water-intensive industries. Platinum Equity acquired Solenis in 2021. Diversey is a global provider of hygiene, infection prevention and cleaning solutions based in Fort Mill, S.C.
Diversey distributes familiar brands like Lysol home cleaner, Dove soap and Suave bath products in the Middle East, Asia Pacific, as well as Turkey and Russia.
Solenis CEO John Panichella will lead the combined private company following the transition and integration.
“This is a strategic combination of two leading global products, services, and technologies providers with proven track records of product innovation who offer truly differentiated solutions to customers,” Panichella said in a released statement. “In combining these two complementary businesses, we expect to usher in a new and exciting chapter in our long history of helping customers tackle core challenges such as water and energy management, partnering on sustainability issues to work toward a cleaner, safer world, and reducing environmental impacts.”
Since the announcement, Platinum Equity executives and top Solenis leaders have provided their thoughts on the merger, which closed in early July.
(Questions and answers have been edited for clarity).
Q: What is this company’s potential?
Platinum Equity Co-President Jacob Kotzubei, who oversees the Solenis investment: It creates an even broader, more global platform, a more diverse platform that adds to the water treatment that we do for municipalities, for industrial companies. It adds hygiene. It’s a company that produces various infection-prevention products. The products are used by businesses and consumers to keep people safe and healthy.
Panichella: When we looked at the Diversey acquisition, we were interested in broadening our exposure to two key segments: food and beverage processing and institutional. Let’s use food and beverage, which is a high-growth market. Diversey participates in dairy, beverages and protein processing. We provide the consumer state-of-the-art cleaning chemistry that keeps the food chain safe and then we can clean up the process wastewater so you comply with all state and government regulations on water discharge.
Solenis general counsel Royce Warrick: It’s an expansion for us. We are companies that bring different solutions and ideas to the table and to customers. To be able to combine what each of us brings to the new company is really exciting, because we’re going to be able to expand our toolbox. We want to be that provider for customers where we can hit all issues that customers may have. This is a great opportunity for us to expand our toolbox and to be an even stronger and more dependable partner with our customers.
Q: Where does this acquisition place Solenis in the market?
Kotzubei: Diversey was an acquisition target that the management team of Solenis had identified as its No. 1 target for many years, even before Platinum acquired Solenis (in 2021). There is one competitor (Ecolab) that’s publicly traded, very well-regarded in the market, trades at very high multiples and has no real competitor. In putting Solenis’ chemicals and services platform together with Diversey’s chemical and services platform, Solenis grows geographically, increases product selection, becomes more similar and competitive to Ecolab. It provides a great opportunity and operational improvement to have a business that’s just simply worth more because of the diversity and comprehensiveness of its portfolio.
Solenis CFO Philip Patterson: Ecolab is a multinational company. We competed very well against their industrial water solutions business. What we never really had was the disinfectant side of the business that Diversey brings. The combination with Solenis really creates a complete competitor to Ecolab and that’s what we really like about this acquisition. It also gives us scale. It always helps to be a bit bigger. We expect to be over $7 billion in top line, $7.1 to be exact in 2023, and that’s helpful.
Q: How does this fit into the overall M&A strategy with Solenis?
Kotzubei: We’ve always wanted to grow the platform. We’ve always wanted to diversify the platform and this really represents a hand-in-glove combination that is incredibly complementary and takes two leading businesses, puts them together and creates an opportunity to embrace the customer in a more comprehensive way addressing all of the customer’s needs around infection prevention, hygiene and water treatment.
Platinum Equity Managing Director Nathan Eldridge (M&A deal lead): This creates a larger, more expansive platform that will enable more opportunities for the company to grow organically and through additional acquisitions in core and adjacent markets going forward.
Q: Give us a real-world example of how this deal impacts consumers.
Panichella: Take a hotel. The hotel has a pool and spa, which is an opportunity for our pool solutions. The hotel has a kitchen so we can leverage Diversey’s chemistry in the kitchen. It has a laundry where our laundry products come into play. It has floor care, and it has a water treatment to heat and cool the building. When you look at the whole portfolio of solutions that Solenis can now offer this hotel, from pool and spa, building care, floor care, kitchen, laundry, it really surrounds that customer with a whole complete offering of solutions from Solenis.