Target: Eco services
Price: $800 million
Seller: Solvay SA
Financial Adviser: Credit Suisse Group
An auction for the unit, referred to as eco services, started the last week of February, the people said. Eco services has annual EBIDTA of around $110 million, one of the people added.
Solvay said it would explore strategic options for the unit but did not give more details. A Solvay spokeswoman did not respond to a request for comment on the details of the sale. A Credit Suisse spokesman declined to comment.
Solvay’s eco service business produces and regenerates sulfuric acid, which is used as a catalyst at refineries in the production of high-octane gasoline.
The unit is a supplier to the largest refineries on the U.S. West Coast, along the U.S. Gulf of Mexico and in the U.S. Midwest and Canada, according to its website. It accounted for 9 percent of Solvay’s net sales of 3.13 billion euros ($4.32 billion) in 2013.
In a conference call with analysts to discuss the company’s earnings on Wednesday, Solvay Chief Executive Jean-Pierre Clamadieu said a sale of eco services would simplify Solvay and allow it to reallocate resources to fast-growing businesses.
“I think this business could be qualified as a cash cow or a sustainable cash generator to use a nice terminology,” Clamadieu said about eco services.
Private equity has shown a strong appetite for unloved divisions being carved out of companies, seeking to avoid frothy auctions for companies amid buoyant equity capital markets.
In the chemical sector, Clayton, Dubilier & Rice LLC struck a $1.8 billion deal in February to buy the water technology unit of U.S. chemical manufacturer Ashland Inc.