Cinven and Investcorp team up again

The private equity firms, which last year acquired the speciality chemicals division of AstraZeneca, have joined forces to bid for Degussa Huls.

Never change a winning team, as they say. Private equity firms Cinven and Investcorp are jointly bidding for the precious metals and catalysts business of Degussa-Huls, the German chemicals group, according to the Financial Times.

The firms have invested alongside each other before. Last year they paid £1.3bn to buy Avecia, the speciality chemicals division of AstraZeneca.

To win Degussa Metals Catalysts Cerdec (DMC), Cinven and Investcorp will have to beat UK chemicals group Johnson Matthey, which put a bid on the table in 2000. The private equity managers have made an offer that values DMC at E1.2bn (£768m), the newspaper reports.

Degussa said last year it planned to dispose off the independent subsidiary, which produces materials used in communications, electronics and sensor technology.

People familiar with the situation have said a flotation of the DMC is unlikely but could still go ahead. It is believed that a trade sale would produce more value for shareholders.

DMC makes automotive catalysts and fuel cells, ceramic and glass coatings, and electronic and technical materials and trades in precious metals. Last summer DMC said it expected sales to rise 18 per cent this year and at an average of 14 per cent over the next few years. The company has a turnover of E4bn, has about 5,000 staff and operates in 30 countries. Last month, Degussa, which is majority owned by EON, the German utility, acquired UK chemicals group Laporte for £1.36bn.