(Adds background, no comment from companies)
LONDON/FRANKFURT, Sept 5 Buyout groups EQT and
CVC have made a joint bid to buy crop-protection
company Cheminova in a deal that could be worth about 1 billion
euros ($1.3 billion), two sources familiar with the deal told
The two private equity groups submitted an offer this week
before expiry of a deadline set by Cheminova's owner Auriga
Industries, the sources said.
United States-based FMC Corp has also expressed
interest in the business, one of the sources said, while another
source said that Asian groups have also been circling.
The bid from EQT and CVC values Cheminova at about eight to
nine times its expected 2014 earnings before interest, tax,
depreciation, and amortisation (EBITDA) of 120 million euros,
the sources said.
Auriga, EQT and CVC declined to comment, while FMC was not
immediately available for comment.
Cheminova, which develops and supplies crop-protection
products to increase the yield and quality of crops, posted a 14
percent rise in EBITDA to 305 million Danish crowns ($53
million) in the second quarter on sales up 3 percent to 1.9
It says it has about 2-3 percent of the global market share
and operates out of more than 20 countries.
Makers of weedkillers have experienced higher second-quarter
demand than usual from the United States, as farmers rush to
cultivate fields after a long winter, while fungicide producers
have benefited from increased demand from Asia.
Banking sources have said that EQT and CVC have lined up
debt financing of 720 million euros to back a potential
acquisition of Cheminova.
Auriga Industries, which announced in June that it had begun
a review of its strategic options for Cheminova, is being
advised by JP Morgan.
Cheminova represents the only business of holding company
Auriga, which is expected to delist after the sale. Aarhus
University is its largest shareholder, with a stake of nearly 40
percent, according to Reuters data.
Shares in Auriga were down 3 percent at 1345 GMT.
(1 US dollar = 5.7435 Danish crown)
(1 US dollar = 0.7717 euro)
(Reporting by Claire Ruckin, Arno Schuetze, Anjuli Davies and
Frank Siebelt; Editing by David Goodman)