Arizona Chemical placed on selling block - sources

21 July 2010 21:28  [Source: ICIS news]

NEW YORK (ICIS news)--US-based Arizona Chemical has been put up for sale while private equity owner Rhone Capital pursues an initial public offering (IPO) at the same time, sources said on Wednesday.

“The owner of Arizona is pursuing a parallel track with an IPO and a sale. They are on the second round of bids,” said one source in the financial community.

“Rhone Capital is pursuing a parallel process for Arizona,” said another financial source.

New York-based Rhone Capital declined to comment, and Arizona Chemical did not respond to a request for comment.

One source estimated that Arizona could fetch around $1bn (€780m) in a sale based on a 7-times multiple of estimated annual earnings before interest, tax, depreciation and amortisation (EBITDA) of around $140m for 2010.

“It will be a very good deal for Rhone Capital,” he said.

Rhone Capital acquired Arizona Chemical from International Paper in February 2007 for $485m. Arizona produces pine-based chemicals, including tall oil fatty acids (TOFA), which provide similar characteristics to C18:1 oleic acid, such as being a liquid at room temperature.

On 12 April, Arizona Chemical filed an S-1 registration statement with the US Securities and Exchange Commission for an IPO. It plans to list its shares on the New York Stock Exchange under the symbol “ARZ”.

In 2009, the company generated $93.9m in adjusted EBITDA on sales of $767.5m. EBITDA was up from $92.7m in 2008 and $66.9m in 2007.

($1 = €0.78)

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By: Joseph Chang
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