SEVERAL LOCAL and international law firms advised on the 226 million euro ($375.4 million) cash purchase of the ceramics division of Johnson Matthey by the Endeka Ceramics Group, a company established by private equity investment fund Pamplona Capital Partners I, LP.
DLA Phillips Fox advised Pamplona through Jones Day’s London office, which co-ordinated the worldwide acquisition, on the Australian aspects of the transaction.
Corrs Chambers Westgarth and Middletons advised the vendor respectively on the ultimate sell off and the carve out of the ceramics division. Herbert Smith was the lead law firm for Johnson Matthey.
One of the lead lawyers on the deal, senior associate Nick Diakoumis at DLA Phillips Fox’s Melbourne office, said it was “one of the more complex deals” he had worked on.
Diakoumis said they advised both Jones Day and the client. “It was probably a 70-30 split between Jones Day and the client,” he said.
DLA Phillips Fox’s lead partner on the deal was Mark Burger. Corrs’ team was led by partner Jeremy McCarthy, assisted by lawyer Campbell Unsworth.
Diakoumis said each jurisdiction where the Johnson Matthey group operated in had to spin off its particular business.
“In the Australian context, what that meant was setting up a new batch of companies, [and] moving up the ownership,” he said.
Once that was done, he said the chemical business had to be transferred across to the new Johnson Matthey structure and then make the full sale to calve it out of the Johnson Matthey group.
“So there were a number of complicated steps: working out where the assets were, and in which company of the business the assets were located.”
The Australian arm of Johnson Matthey is responsible for sourcing zircon, an important mineral in ceramics, from around the globe, including 18 different countries. “[The Australian division] source it, do the contracts, and then outsource to all the sister companies,” said Diakoumis.
“Each country has its own contractual terms and conditions. The first step was to assign that contract into the new Johnson Matthey company and then ensure that the change in control didn’t bring the contract down after completion into the Endeka Group.”
The transaction required regulatory approval in Germany, Spain and Portugal and was completed on 1 March.
The new Australian company that Endeka bought is now called Australian International Ceramics.
The original Johnson Matthey ceramics division was headquartered in Spain and supplied raw materials to the tile and sanitary ware industries. The sale raised approximately £30 ($73) million for Johnson Matthey.
The company’s chief executive, Neil Carson, said in a statement the sale “represents a further step in our strategy of focusing the group on its core activities in catalysis, precious metals and fine chemicals”.
Like this story? Read more: