Koch Industries And Goldman Sachs Buyout Flint Group

The Goldman Sachs Group, Inc.’s (NYSE:GS) arm – Goldman Sachs Merchant Banking Division — declared that it has collaborated with Koch Equity Development LLC – a unit of Koch Industries Inc. — to acquire Flint Group from U.K.-based private equity firm CVC Capital Partners Ltd. The deal is expected to be closed by second half of 2014.

Though there is no official disclosure about the financial terms and conditions of the deal, the acquisition price may settle over €2.2 billion ($3 billion). The proposed investment will take place through a new entity to be created by Koch Equity Development and Goldman.

Luxembourg-based Flint Group, one of the major players in the global market, is engaged in producing inks and other print consumables including flexographic printing plates and image transfer products and chemicals for the packaging and print media industry. Flint Group has grown through meaningful mergers and acquisitions.

: Koch Industries

Goldman has a history of successful investments undertaken in collaboration with other firms. Hence, we remain optimistic about the collaboration of Goldman and Kansas based Koch Industries, which is one of the largest privately owned companies in the world.

Goldman is set to benefit in the long run as the latest move comes as a part of its strategy to invest in major global franchises and aid them to prosper organically as well as through acquisitions. Further, Goldman believes that with an enhanced capital level, Flint group has sufficient potential to gain in a growing printed packaging market, apart from its interests in print media industry.

Notably, both Goldman and Koch Industries bank upon the strong management team of Flint Group that has played a pivotal role in driving Flint Group as a leading global market player.

As core operations of financial institutions are struggling to earn decent revenues amid a still low interest rate environment, firms like Goldman are continuously exploring opportunities to drive earnings from alternative revenue sources. We believe that Goldman is poised to benefit from the proposed deal owing to the synergies.

Bottom Line

With the economy gradually reviving from the financial meltdown and regulators’ continuous efforts in establishing market stability, the private equity investments continue to roll in a favorable capital market. We look forward to Goldman’s increased involvement in such deals that will definitely impart positive vibes to investors.

Goldman currently carries a Zacks Rank #3 (Hold). Investment Technology Group Inc. (ITG), E*TRADE Financial Corp. (ETFC) and BGC Partners, Inc. (BGCP) are better-ranked stocks. While Investment Technology holds a Zacks Rank #1 (Strong Buy), both E*TRADE Financial and BGC Partners carry a Zacks Rank #2 (Buy).