American Securities explores sale of General Chemical-sources

NEW YORK, July 31 Wed Jul 31, 2013 5:55pm EDT

NEW YORK, July 31 (Reuters) - Private equity firm American Securities LLC is exploring a possible sale of specialty chemicals manufacturer General Chemical Corp that could fetch more than $1 billion, three people familiar with the matter said this week.

The Parsippany, New Jersey-based company, which provides water treatment products used by municipalities and ingredients used in prescription drugs, is working with Barclays Plc on the potential sale, the people said.

The people asked not to be identified because the matter is confidential. American Securities and Barclays declined to comment, while a General Chemical executive did not respond to a request for comment.

General Chemical produces organic and inorganic chemicals for industries that also include food and beverage, pulp and paper, industrial processing and agriculture, according to American Securities' website.

American Securities took General Chemical private in 2009 for $673 million, including assumption of $262 million in debt and liabilities, according to a note at the time by Moody's Investors Service Inc.

Specialty chemical companies can make appealing acquisitions for industrial conglomerates. Last year, buyout firm AEA Investors LP sold Houghton International Inc, a U.S. producer of metalworking fluids and other chemicals, to a unit of family-owned Indian conglomerate Hinduja Group for $1.05 billion.

Public specialty chemical companies traded at an average 9.7 times 12-month EBITDA to the end of May, according to a June report by KeyBanc Capital Markets Inc.

New York-based American Securities invests in companies with revenues ranging from $500 million to $2 billion and has more than $8 billion in assets under management, according to its website.