Global investment group Investcorp has agreed to the buyout of Stahl, a leading manufacturer of speciality chemicals for leather finishing and other specialised coatings and colouration applications, for euro 375 million ($338.6 million).

Stahl is one of five operating businesses within the Avecia Group, itself jointly owned by Investcorp and Cinven. The buyout is expected to be completed in January 2002.

Stahl reported sales of euro 338.7 million in 2000 and has a leading global position in leather finishes underpinned by its brand reputation and 70 year history in the leather industry. The company also holds important positions in colours and tanning products, Permuthane coatings for synthetic substrates and industrial colorants. It operates 13 manufacturing plants and 21 technical service laboratory sites in more than 28 countries.

The buyout will enable Stahl to continue to grow its core leather finishes markets and associated new business areas, particularly through expansion in the Asia Pacific region. The management team, led by chief executive officer, Wilhelm H. Vaskovich, has a proven track record of delivering high quality results driven by service excellence and advanced technologies in the high value end of the leather finishing market.

Avecia will use the proceeds of the sale to pay down senior bank debt and fund additional growth investments in its strategically important biotechnology and pharmaceutical business sectors. The buyout of Stahl follows the successful sale of Novacote (formerly part of the Stahl Group of businesses) to COIM, the Italian specialty chemical company, in June 2001.

The transaction is being financed with a euro 240 million ($216.7 million) of debt facilities (including a euro 35 million revolving facility) underwritten by JP Morgan.

Philippe M Costeletos, a member of Investcorp's Management Committee, said: "Stahl has performed strongly as an Avecia business unit and we believe this buy-out will give it greater potential for market growth as an independent business."