March 1st, 2010
Brenntag seeks acquisitions in Asia: IPO nearer
Brenntag seeks acquisitions in Asia: IPO nearer, Debtwire. Frankfurter Allgemeine Zeitung 26.02.10
Brenntag, the German chemical distributor, may make acquisitions in Asia, Frankfurter Allgemeine reported. The German daily cited chief executive Stephen Clark as saying more acquisitions are planned as the market continues to consolidate. He said Brenntag may buy large rivals in Asia, and these buys could be worth considerably more than its usual acquisitions, while remaining under EUR 100m per transaction.
The report said the main reason for Brenntag's planned IPO is to strengthen the company's capital base in order to help finance future growth. The report said that since 2007, Brenntag has acquired 21 companies with a combined value of EUR 230m.The newspaper reported that Brenntag will also be able to reduce its debts thanks to the capital increase that will form part of its upcoming IPO. The daily cited Clark as saying that the IPO, slated to happen in the coming few weeks, will involve a EUR 500m capital increase. In addition, owners BC Partners (83%) and Bain Capital (10%) will shed some of their shares in the IPO. While the number of shares the two private equity firms will sell is not yet certain, the report cited Stefan Zuschke, BC Partners' head for Germany, as saying BC will keep more shares than it sells.The newspaper cited unidentified observers as predicting a total volume of EUR 700m for the IPO. The paper learned from unidentified financial sources that the transaction may take place before Easter.
The report cited Brenntag finance chief Juergen Buchsteiner as saying the IPO will help reduce the company's debts, allowing a mezanine tranche to be repaid. He said this will bring the company more financial flexibility and reduce its interest expenses. As of the end of 2009, the report said, Brenntag had net debts of EUR 1.8bn. Another German daily, Boersen-Zeitung, said Brenntag closed 2009 with EUR 6.4bn turnover and EBITDA of EUR 477m. In a separate article about the company, Boersen-Zeitung said, without naming sources, that a dual-track process will not be pursued at Brenntag. Instead, the daily learned, only an IPO is being examined as an option, not a sale of the company to an investor. The daily learned that the process of seeking out institutional investors for Brenntag ahead of its IPO has been completed, and the securities prospectus has been submitted to the financial regulator Bafin, which has 20 working days to approve it.