Rockwood Fund I, a R4.5bn South African leveraged buyout fund managed by Rockwood Private Equity, and Thebe Investment Corporation have exited Safripol to KAP Industrial Holdings for an equity value of R4.1bn ($310m).

Completion of the transaction, which is expected to close on January 1, 2017, is subject to customary regulatory approvals and conditions precedent.

Andrew Dewar, CEO of Rockwood, said: "This is a large private equity transaction and we are delighted with the outcome."

“It represents years of hard work by an outstanding management team and is a fitting completion to the original acquisition. Thebe has been an ideal partner and we are very grateful to them for their team's insights and active contribution to the company,” he added.

Safripol manufactures polypropylene and high-density polyethylene, used to manufacture an extensive range of industrial and consumer plastic products.

Established in 1972 as a joint venture between Hoechst and Sentrachem, Safripol was purchased in 1999 by Dow Chemicals and subsequently sold in 2006 to Rockwood, Thebe and certain members of the management team. 

Dewar said that “Rockwood is very pleased that its investment in Safripol has yielded well above average private equity returns”.

Listed on the Johannesburg Stock Exchange, KAP is an industrial group, predominantly located in and focused on business operating in African markets.

KAP is invested in a number of industry-leading industrial businesses managed within two divisions: Diversified Logistics and Diversified Industrial.

The Diversified Industrial segment includes chemical operations comprised of its Hosaf and Woodchem businesses.

It is one of KAP’s strategic objectives to grow its business by investing in industry leading industrial assets that are complementary to its existing operations.

The acquisition of Safripol will establish a new Diversified Chemical division for KAP, which will incorporate KAP’s existing Woodchem and Hosaf businesses.

"The acquisition of Safripol is complimentary to KAP's existing operations.  KAP has an exceptional management team and we always saw Safripol as an ideal fit for their business. We are very pleased to have concluded a deal with them," said Dewar.  

Following the Safripol exit, Rockwood Fund I’ holdings include: a household furniture maker Bravo; a facilities management, catering, cleaning and hygiene services firm Tsebo; a waste-management company Enviroserv; and Kwikspace, a prefabricated buildings manufacturer.

Commenting on Rockwood's strengths, Dewar said: "Key to our success is the stability our senior leadership team, all of whom were employed by Absa Capital and were involved in the acquisition of our portfolio.”

In 2013, Rockwood was acquired by its management team from Absa at the same time that Absa, in the only secondary private equity transaction of its kind in South Africa, sold its majority interest in the Absa Capital Private Equity Fund I to two international private equity fund investors. 

Rockwood is currently fundraising a $500m generalist fund to invest in South African industrial and service companies.