VCs eye E2.5bn German chemicals unit

Germany’s MG Technologies has set the first week of December as the deadline for first-round bids for its Dinamit Nobel chemicals unit, which has attracted considerable private equity interest.

Financial buyers are expected to be among those submitting bids for the Dinamit Nobel chemicals business, which will receive first-round bids in early December.

 

The sale, which also includes chemicals distributor Solvadis, is expected to fetch around E2.5bn. According to a Reuters report, the unit has attracted interest from private equity firms including Kohlberg Kravis Roberts, Blackstone Group, CVC Capital Partners, Permira, BC Partners, Cinven and Advent International as well as trade buyers such as Dutch chemicals maker DSM.

 

The business was put up for sale following MG’s decision to focus on speciality mechanical engineering, including process engineering, components and plant engineering. Dinamit Nobel supplies speciality chemicals to industries ranging from the automotive sector to construction.

 

MG, which had around E1.3bn of debt at the end of September, said the sale of Dinamit Nobel and Solvadis would allow it to cut debt and expand further into the US and Asia. It added that it would draw up a shortlist of bidders before Christmas, with meetings and management presentations beginning in the New Year.

 

There have been a number of deals completed by private equity firms in the European chemicals sector recently. Earlier this month, Rhone Capital acquired the speciality chemicals division of Alcoa/Alumina for an undisclosed sum, and Electra Partners Europe backed the MBO of Azelis, a speciality chemicals distributor.