Canada Pension Plan nears deal to buy CeramTec in Germany

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- Canada Pension Plan Investment Board is nearing a deal to acquire a stake in CeramTec GmbH, the German technical ceramics maker owned by buyout firm BC Partners, people with knowledge of the matter said.

The transaction is set to market CeramTec at about 3.8 billion euros, including loans, said the people, asking not to be identified because the information is private. BC Partners and Canada Pension plan will both own about half of CeramTec after the deal, which could be announced as soon as Tuesday, according to people.

The plan will contribute about 800 million euros of equity as part of the deal, people said.

A consortium of Partners Group Holding AG and CVC Capital Partners was competing with suitors including chemical producer Celanese Corp. to acquire the business, Bloomberg News reported last month. BC Partners had been seeking a valuation of at least 4 billion euros from the potential sale, people with knowledge of the matter have said.

BC Partners is selling its CeramTec holding to its 10th fund as part of the transaction, allowing it to own the company for longer while returning money to backers of its 11th Fund, the people said. The people of Canada's PSP Investments and the Ontario Teachers Pension Plan are selling their stakes in CeramTec.

They teamed up with BC Partners on its original purchase of CeramTec, which valued the company at about 2.6 billion euros including debt, Bloomberg News reported at the time.

Representatives for Canada Pension Plan and BC Partners declined to comment. Spokespeople for CeramTec, PSP and Ontario Teachers' couldn't be reached or said they couldn't immediately comment.

CeramTec produces industrial and technical ceramics for the medical, automotive, electronics and chemicals industries, making everything from hip joints to car parts. It has about 3,500 employees. The company, which takes its roots back to a porcelain factory from 1903, had more than 550 million euros of sales in 2020, according to its website.

The deal marks at least the second time this year that BC Partners has brought in new investors to one of its portfolio companies. In June, it moved the academic publisher Springer Nature in to a new special-purpose fund after abandoning plans for an initial public offering of the business by the Neuberger Berman Group LLC.