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UPDATE 1-CD&R buys stake in JohnsonDiversey for $477 mln
* CD&R to gain 46 percent stake
* Unilever NV will retail a 4 percent stake
* Johnson family to retain 50 percent stake
* $1.9 bln recap made up of $1.4 bln external financing (Adds details on financing, quotes in paragraphs 3-7, second byline, New York dateline)
By Jessica Hall and Megan Davies
PHILADELPHIA/NEW YORK, Oct 7 (Reuters) - Private equity firm Clayton Dubilier & Rice Inc said on Wednesday it agreed to invest $477 million to take a 46 percent stake in commercial cleaning company JohnsonDiversey as part of a broader $2.6 billion recapitalization of the company.
JohnsonDiversey, which has annual sales of more than $3 billion, provides cleaning and sanitation services for the retail, healthcare and food and beverage industries in more than 175 countries. The company has been one-third owned by Unilever NV (UNc.AS)since 2002.
The recapitalization deal will be backed by a $1.9 billion debt financing package. That includes about $1.4 billion of external financing -- both bank debt and bonds -- and about $250 million seller financing from Unilever, CD&R said.
The deal was partly prompted by the fact that JohnsonDiversey would have to refinance its debt in 2010, and now was an opportune time to do so, said Donald Gogel, president and CEO of CD&R.
Eleven banks are willing to participate in the financing, CD&R said. It is a "very constructive sign" that banks will lend, said Gogel, although he stressed that it was a deal for a "very stable, global business".
Private equity firms have had trouble striking leveraged deals since the credit crisis shut off access to cheap leveraged loan financing, but that market has been improving of late.
"We typically do 2 or 3 deals a year," said Gogel. "I don't want to say it is business as usual, but at least for us, this is a good period, valuations are down, financing is back and as long as you have something special to offer -- in this case, our familiarity with these businesses -- we're in a position to stay busy."
Under the terms of the agreement, the Johnson Family of Racine, Wisconsin, will retain a 50 percent ownership stake in the company, and S. Curtis Johnson will remain chairman. CD&R Operating Partner James Berges will serve as chairman of the executive committee.
Unilever will retain a 4 percent ownership interest in the company, which will continue under separate agreements to sell and distribute certain Unilever and S.C. Johnson & Son Inc products.
JohnsonDiversey has been one-third owned by Unilever since its acquisition of DiverseyLever in 2002. As part of that deal, JohnsonDiversey agreed to purchase all or part of Unilevers ownership stake at a future date.
The company also said it would change its name to "Diversey Inc." (Reporting by Jessica Hall; Editing Bernard Orr and Carol Bishopric) (For more M&A news and our DealZone blog, go to here)
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