Private Equity Bidders Circling Around BMS
Private equity companies Advent, Carlyle, Cinven, CVC and KKR are reported to be interested in teaming up with each other or sovereign wealth funds to bid for Bayer MaterialScience.
In September, Bayer CEO Marijn Dekkers announced that the holding would pursue a stock market launch for the sub-group, which produces engineering plastics polycarbonate, upstream and downstream polyurethane products as well as specialty coatings.
Dekkers said Bayer intended in future to "focus entirely" on the Life Science businesses - HealthCare and CropScience, a move long urged by the financial markets. He said the plastics business would be floated in 12 to 18 months, although in response to questioning, he did not rule out an outright sale.
As the size of the company with sales of €11 billion would make it difficult if not impossible for even the private equity giants to stem a takeover, a multi-company consortia would be the only alternative to an ipo for BMS, analysts believe.
By the same token however, BMS' management seems unlike to favor this, observers say, as having a variety of owners would likely cramp decision to invest in capital-intensive new plant and equipment.
Analysts for Equinet bank value the company at not quite €10 billion, while DZ Bank analysts put the price closer to €UR 11 billion, including debt.
In the first half of 2014, Bayer said the MaterialScience business increased in EBITDA before special items to 33%, making good some of the ground it gave up in 2013. Figures for the first nine months of 2014 will be reported on 30 October.
