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Solvay gets bid interest for Acetow, nylon businesses

Saturday, Nov 05, 2016

Solvay has attracted buyout groups Blackstone (BX.N) and Platinum Equity as suitors for its Acetow unit and is also short-listing bidders for its nylon business, people familiar with the matter told Reuters, as the Belgian chemicals group shifts its focus to high-tech materials.

Acetow, a maker of cellulose acetate tow mainly used in cigarettes filters, made 542 million euros ($601 million) in sales last year, down 16 percent. Final bids are due Nov. 14, one of the people said, adding Blackstone was seen as a front runner in the auction.

Solvay's polyamides unit, in turn, is one of the world's largest makers of nylon, a heat resistant engineering plastic also known as polyamide 66 for various uses such as textiles, engine air ducts and cooling fans. It had sales of 1.45 billion euros last year.

As part of a push by CEO Jean-Pierre Clamadieu to focus on more innovative products, Solvay last year bought Cytec Industries, a maker of carbon-fiber reinforced materials, for $5.5 billion.

"Solvay's portfolio is broad and relatively complex. This absorbs management time at a critical juncture for the group as the newly acquired assets from Cytec are integrated," Barclays analysts said in a note in August, welcoming the expected divestments.

UBS analysts said earlier this year the Acetow and polyamide businesses could fetch a combined 2.1 billion euros.

Suitors for the nylon business include petrochemicals group Ineos, investor Leonard Blavatnik's Access Industries and several buyout firms including Apollo, Advent, Bain, SK Capital and Triton, people close to the matter said.

Solvay, Ineos, Blackstone, Bain and Advent declined to comment. Officials at the other companies were not immediately available for comment.

Next week, Solvay will shortlist suitors for the second round of bidding, two people close to the matter said.

Due to a joint venture in precursor materials, Solvay first offered the business to Lycra maker Invista earlier this year, but no deal resulted from those talks.

Invista, a former DuPont (DD.N) business now held by Koch Industries, co-owns the Butachimie venture with Solvay, jointly producing precursor materials for polyamide 66.

A new owner of the Solvay business will have to deal with Invista shielding its technology know-how, which might favor financial investors over industry players, two of the sources said.

Solvay, Invista and SK Capital's Ascend Performance Materials are the largest producers of polyamide 66.

Reuters reported in June that Solvay was pressing ahead with the sale of the two businesses. nL8N19F2VJ]

The functional polymers division, of which polyamide 66 is by far the largest component, had adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 141 million last year.

One of the sources said debt financing of more than 800 million euros for the buyer was currently being prepared, based on forecast annual EBITDA of 181 million euros.

 

Source : reuters.com

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