Blackstone seals A$750m Australia carve-out

The firm will buy the chemicals business of parent company Orica as the mining firm refocuses its portfolio

The Blackstone Group has agreed to acquire the chemicals business of Melbourne-headquartered chemical and explosives maker Orica for A$750 million (€518 million; $647 million), according to a statement.

Blackstone will make the investment from Blackstone Capital Partners VI, a 2011-vintage vehicle which closed on $16.27 billion. According to Orica’s full year results presentation, the chemicals business’ EBIT for the year ending 30 September 2014 was A$67.2 million.

The sale includes the chemicals trading businesses in Australia, New Zealand and Latin America, along with the Australian Chloralkali manufacturing business and Bronson & Jacobs, a supplier to the food and nutrition and health and personal care industries in Australia, New Zealand and Asia.

Orica decided to sell the chemicals business following a strategic review. According to the company’s full year results presentation, the separation “completes a decade long transition into a pure play mining services business”.

Orica will retain responsibility for legacy environmental issues at contaminated sites as part of the transaction, which is expected to close in the first quarter of 2015.

The deal follows a period of high management turnover for Blackstone in the Asia-Pacific region. In April the firm lost Australia fundraiser Martin Donnelly, who had been managing director of the hedge fund solutions group since 2011, focusing on developing client relations in the region.

A few months earlier the firm lost Paul Costello, non-executive chairman of Blackstone Australia and New Zealand operations, after only two years in the role. Costello joined in 2011 from Australian superannuation fund Future Fund to help grow Blackstone’s business in the region. He was later replaced by senior advisor James Carnegie, who became senior managing director and head of Australia operations.

Blackstone’s India and China chairmen also departed at the end of last year, and the firm’s Asia head, Michael Chae, relocated back to the US in April following three years at Blackstone’s Hong Kong office. He continues to oversee Blackstone’s private equity activities in the Asia-Pacific region, as well as taking responsibility for media and communications sector investments.