LONDON New Mountain Capital is vying with larger private equity rivals Bain Capital and Cinven CINV.UL to buy Dutch chemicals distributor IMCD, which has nearly 1 billion euros ($1.3 billion) in sales, people familiar with the matter said.
The trio are in the second round of bidding for the Rotterdam-based chemical distributor, which has been owned by ABN Amro's former private equity arm AAC Capital since 2005.
Binding bids are due next week, one of the people said, adding Hellman & Friedman had also entered the second round of the auction but had dropped out.
The private equity firms either declined to comment or were not available for comment. IMCD did not respond to a request for comment.
IMCD has 800 staff in 31 countries and 925 million euros ($1.2 billion) in revenues, according to an August 30 press release. Its clients include specialty chemicals companies, such as Wacker Chemie AG (WCHG.DE), and producers of ingredients used to make food and drugs.
New York-based New Mountain, which manages investments worth more than $8.5 billion, is run by Steven Klinsky, a former top lieutenant of leveraged-buyout (LBO) pioneer Teddy Forstmann.
The company generates earnings before interest, tax, depreciation and amortization of about 70 million euros (EBITDA), the people said. Banks are offering to lend up to about 5.5 times EBITDA, one said.
The private equity firms tabled initial bids of between 600 and 700 million euros for the business, another of the people said, or about 8.6 to 10 times EBITDA.
That is roughly in line with German chemicals distributor Brenntag (BNRGn.DE), floated by BC Partners BCPRT.UL earlier this year, which trades at an enterprise value of about 8.9 times trailing ebitda.
(Editing by David Cowell)
($1 = 0.7541 euro)