By Pamela Barbaglia, Elisa Anzolin and Stephen Jewkes
LONDON/MILAN, Oct 16 (Reuters) – Buyout fund Investindustrial is gearing up to sell its specialty chemicals firm Polynt-Reichhold in a deal worth up to 2 billion euros ($2.34 billion) that is expected to launch early next year, five sources familiar with the matter told Reuters.
Italy-based Polynt-Reichhold was formed in 2017 by combining Investindustrial-owned Polynt and Black Diamond Capital-backed Reichhold.
The business, which operates 41 plants around the world with a strong presence in Europe and North America, has over 2 billion euros in annual revenues.
It could be valued at between 1.5 and 2 billion euros including debt, based on core earnings of 241 million euros in 2019, two of the sources said.
Investindustrial, led by founder Andrea Bonomi, is looking to hire banks in the coming weeks to prepare the company for an auction process that could kick off in the first quarter of 2021, the sources said, speaking on condition of anonymity.
A spokesman for Investindustrial declined to comment.
Polynt-Reichhold raised a 475 million euro term loan to refinance existing debt in February, with JPMorgan acting as sole physical bookrunner and admin agent.
The business, based near the northern Italian town of Bergamo, provides its specialties, intermediates and composite chemicals to a variety of industries including the transportation, construction, medical and food additive markets.
It is expected to draw interest from both industry players and heavyweight private equity funds, another source said.
He added that Investindustrial is closely monitoring the ongoing sale of Lonza’s LONN.S specialty ingredients unit – a business valued at 3 billion to 3.5 billion Swiss francs – as it aims to address the same bidders once the Swiss firm picks a winner.
“The timing is key. Most people are still working on the Lonza dossier and will only shift their focus to Polynt when there’s clarity on the Lonza process,” this source said.
Investindustrial took indirect control of Polynt back in 2008 through another portfolio company, Specialty Polymers, and subsequently grew its revenues more than three-fold with the Reichhold tie-up.
($1 = 0.8534 euros)
(Reporting by Pamela Barbaglia in London, Elisa Anzolin and Stephen Jewkes in Milan and Arno Schuetze in Frankfurt; Editing by Elaine Hardcastle)
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