NewsFlashRockwood to sell Groupe Novasep

11 October 2006 20:17  [Source: ICIS news]

By Joseph Chang and Clay Boswell

NEW YORK (ICIS news)--Rockwood Holdings plans to sell fine chemicals and pharmaceutical services company Groupe Novasep, sources in the financial community said on Wednesday.

“Rockwood has hired JPMorgan and Lazard to sell Novasep,” said one source.

Likely bidders include Indian fine chemical firms and private equity.

“You don’t have to look far to see who’s buying all these assets - it’s mostly the Indian firms,” said one observer. “But these are tough businesses to sell and get financing on because of unsteady cash flow.”

This year, India-based Dishman bought Carbogen and Amcis from Solutia for $74.5m (59.5m), and Shasun acquired Rhodia’s fine chemicals business for an undisclosed sum, while equity firm TowerBrook Capital picked up Clariant’s fine chemicals business for $86m.

Rockwood may also pursue an initial public offering (IPO) of Groupe Novasep, according to another source.

“They are more likely to do an IPO, as they are doing a dual track process,” he said. “I think that is more likely given the price the seller has been told that it could achieve in an IPO versus a sale.”

Rockwood is seeking to float Groupe Novasep on the Paris bourse rather than in the US, said the source.

The March sale of Pratteln, Switzerland-based Rohner AG to Arques Industries may have been a preparatory move. One of the three fine chemicals companies that Rockwood merged with purification specialist Groupe Novasep in January 2005, Rohner’s historical specialty is graphics chemicals and dyestuffs. Although a major investment in 2002 added capacity to serve the pharmaceutical industry, Rohner has been hit hard by the loss of its traditional markets to Asian competition.

In the second quarter, Groupe Novasep posted an 11% decline in sales to $84.3m, primarily on the sale of Rohner. However, adjusted earnings before interest, taxes, depreciation and amortisation jumped 55% to $19.8m on the disposal of Rohner, as well as higher sales of Tamiflu applications.

Rockwood said it would not comment on any rumours or speculation.

Look for the full article in ICIS Chemical Business Americas’ 16 October issue.

By: Joseph Chang
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