Bain in $857.5 million Dutch chemicals deal: sources

By Simon Meads

LONDON (BestGrowthStock) – Private equity firm Bain Capital agreed to buy Dutch chemicals firm IMCD in a deal valuing the business at close to 650 million euros ($857.5 million), people familiar with the situation said on Monday.

The U.S. buyout group was in the second round of bidding for the Rotterdam-based chemical distributor, which generates nearly 1 billion euros of annual sales.

Rivals New Mountain Capital and Cinven (CINV.UL: ) dropped out of the process leaving Bain clear to agree a deal over the weekend, ahead of a second round bid deadline on Monday, one of the people said.

The private equity firms tabled initial bids of between 600 and 700 million euros for the business owned by AAC Capital, the former private equity arm of ABN Amro, since 2005, a person previously told Reuters.

Bain and AAC Capital declined to comment.

IMCD has 800 staff in 31 countries and 925 million euros 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.

The company generates earnings before interest, tax, depreciation and amortization (EBITDA) of about 70 million euros people previously said. Banks are offering to lend up to about 5.5 times EBITDA, one had said.

A deal at about 650 million euros values the business at about 9.3 times EBITDA.

That compares with German chemicals distributor Brenntag (BNRGn.DE: ), floated by BC Partners (BCPRT.UL: ) earlier this year, which trades at an enterprise value of about 8.8 times for the latest year.

Bain previously owned Brenntag before it sold the business to rival BC in 2006. It still owns a small stake in the group.

(Additional reporting by Quentin Webb; Editing by Steve Slater, Mike Nesbit)

($1=.7580 euros)

Bain in $857.5 million Dutch chemicals deal: sources