PE firms circle Deutsche Bahn unit

KKR, Carlyle and BC Partners are among a number of firms being linked with the struggling German railway group’s chemicals distribution business.

Deutsche Bahn, the state-owned German railway group, is planning to sell its Brenntag chemicals distribution business, with private equity firms once again leading list of possible buyers.

 

With sales amounting to E4.3bn in 2002 and 8,300 employees worldwide across 300 sites, Brenntag is the global leader in the growing market for chemicals logistics. Brenntag supplies industrial and specialty chemicals for companies that manufacture and process chemicals. Last year the firm reported a 7.4 per cent increase in EBIT to E164.4m.

 

Deutsche Bahn has confirmed that it is in talks to sell the business, although negotiations are thought to be at an early stage. The Financial Times today reports that Kohlberg Kravis Roberts, Carlyle Partners, BC Partners and CVC Capital Partners are among a group of eight potential bidders for the business.

 

Deutsche Bahn bought Brenntag last year as part of a deal to acquire logistics group Stinnes. It is selling Brenntag to reduce company debt, currently around the E10bn mark.

 

Bain Capital is also thought to be interested in Brenntag’s books. The firm has made a number of industrial acquisitions in Europe during the last six months, recently acquiring two chemical-related businesses in France – SigmaKalon, TotalFinaElf’s decorative paint business, and three basic chemicals units from Rhodia. In October, the firm teamed with Italian chemicals business Dor-Moplefan to buy Trespaphan, the polypropylene business of German chemicals company Celanese.

 

CVC has also been an active participant in the European chemical industries market. The firm currently controls two businesses in the sector: Verdugt, a Dutch manufacturer of specialised organic chemical additives used in the food, animal feed, pharmaceutical and chemical industry, and Acordis, a supplier of man-made fibres for industrial, textile, medical and hygiene applications.


Deutsche Bahn is hoping to complete the sale by the end of the year.