June 11, 2014 / 10:30 PM / 4 years ago

Chemical distributor Univar set to pick IPO underwriters -sources

NEW YORK, June 11 (Reuters) - Private equity-owned chemical distributor Univar Inc is poised to select Deutsche Bank Group AG, Goldman Sachs Group Inc and Bank of America Corp to lead an initial public offering, according to people familiar with the matter.

Clayton, Dubilier & Rice LLC (CD&R) and CVC Capital Partners Ltd have been exploring an IPO of Univar that could value the largest chemicals distributor in North America at more than $6 billion, Reuters reported in April.

Univar’s owners have now decided which investment banks will lead the IPO and are set to meet more banks in the coming days to hand out junior underwriting roles and formalize the mandates, the people said this week.

The sources asked not to be identified because the discussions are private. CD&R, Goldman Sachs and Bank of America declined to comment while Univar, CVC and Deutsche Bank did not respond to requests for comment.

Univar operates a network of 260 distribution facilities around the world, represents more than 3,500 chemical producers, and has about 115,000 customers, according to its website.

The Redmond, Washington-based company had revenues of $9.9 billion for the 12 months to the end of June 2013, according to credit rating agency Moody’s Investors Service Inc.

CVC took Univar private in 2007 for $2.1 billion and in 2010 CD&R acquired a 42.5 percent equity interest, leaving CVC with an equal stake and the remainder owned by management. The deal in 2010 valued Univar at around $4.2 billion.

In 2012, Univar appointed former water treatment products company Ecolab Inc president Erik Fyrwald as its chief executive.

Setbacks in certain key markets have impacted Univar’s revenue growth and pressured its profit margins, according to Moody‘s. To improve profitability, Univar is focused on cutting costs, seeking organic growth opportunities and integrating some of its recent acquisitions, Moody’s said last September.

Germany’s Brenntag AG, the world’s largest chemicals distributor, posted a 3.3 percent gain in first-quarter net income last month as an upswing in Europe and North America offset weaker business in emerging markets. (Additional reporting by Soyoung Kim in New York; Editing by Eric Walsh)

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