Solvay Said Weighing Sale of Acetate Tow Producer
Solvay is said to be exploring the sale of its €1.4 billion acetate tow business.
Citing sources familiar with the matter, the news agency Bloomberg said the Belgian chemical producer has hired Goldman Sachs and Credit Suisse to advise on the sale of subsidiary Acetow, which produces tow for cigarette filters.
Bloomberg said the sale of Acetow may be a prelude for further disposals at a later stage as CEO Jean-Pierre Clamadieu pursues a realignment of the Company.
The Solvay subsidiary is regarded as the leading supplier of cellulose acetate tow to Russia as well as South America.
With 2013 sales of €658 million and EBITDA of €200 million, Acetow, regarded as a cash generator for Solvay and is seen as being on the radar of private-equity firms.
Bloomberg's sources said they believed the business could fetch a multiple of seven times earnings.
In reporting second quarter 2014 results, Clamadieu said he expects a "very high level of profitability" for Acetow for the full year. New capacity coming on stream in China won't have a "significant" impact, he told an analyst conference.
