* Expected to sell for at least 7.1x EBITDA
* Business generates $28 million in EBITDA
* Part of ongoing move to shed units
By Steve Gelsi
NEW YORK, Aug 8 (Reuters-BUYOUTS) - Dow Chemical Co
is seeing interest from private equity firms in buying
its Sodium Borohydride unit, according to sources familiar with
The unit generates about $28 million a year in EBITDA and
could fetch a price of $200 million, or at least 7.1x EBITDA,
two sources said. The auction, being handled by advisory firm
Valence Group, has come down to a handful of final bidders,
Sodium Borohydride is part of the Dow Performance Additives
product line, which Dow Chemical acquired when it bought Rohm
and Haas in 2009, according to Dow Chemical's website. It is
used in the making of other chemicals, many of them earmarked
for pharmaceutical and agricultural applications.
Dow Chemical recently said it is targeting $4.5 billion to
$6 billion in proceeds from the sale of non-strategic assets and
businesses by year-end 2015. Response to the company's carve-out
of its chlorine business, also in the works, "has been positive
with strong early interest," Dow Chemical CEO Andrew Liveris
said on the company's July 23 conference call with Wall Street
Dow Chemical's second-quarter profit fell 62 percent to $882
million, or 73 cents a share, from $2.34 billion, or $1.87 a
share in the year ago period, which included money received in
an arbitration award related to a 2008 petrochemical venture in
Kuwait. Revenue rose by 2 percent to $14.92 billion.
Activist investor Daniel Loeb has been putting pressure on
Dow Chemical to deliver more value to shareholders, while rival
chemical firm DuPont has also been facing calls to return
cash to investors.
A spokesman for Dow Chemical declined to comment on the
Sodium Borohydride deal.
The chemical sector routinely draws strong participation
from private equity firms. Among sponsor-backed deals in recent
months are the following:
* American Securities LLC said in June it would buy
specialty chemicals maker Emerald Performance Materials from Sun
Capital Partners Inc in a deal valued at more than $1 billion,
according to a report by Reuters news service. The transaction
closed on Aug 1.
* Koch Industries and GS Capital Partners, the private
equity arm of Goldman Sachs, in April moved to buy Flint Group,
a maker of printing ink, from CVC Capital Partners in a deal
with a reported value of $3 billion.
* In a mid-market transaction, Arsenal Capital Partners in
March paid an undisclosed sum to seller Hastings Equity Partners
for oil and gas production chemical maker Danlin Industries.
(Buyouts Magazine is a Thomson Reuters publication. Editor: