LANXESS water treatment business on selling block – financial sources

NEW YORK (ICIS)–Germany-based LANXESS is undergoing a sale process for its water treatment business which comprises ion exchange resins and reverse osmosis (RO) membranes, sources in the financial community said.

“There’s an intermediate round going on right now where several bidders have been selected make indicatory bids,” said a source.

“Both strategics and private equity are interested and it appears to be a very competitive process,” he added.

A LANXESS spokesperson said the company does not comment on market rumours.

LANXESS is targeting a valuation in the double-digit EBITDA (earnings before interest, tax, depreciation and amortisation) range, shutting out certain private equity players, a source noted.

Sales of the water treatment business are about €210m, with EBITDA of around €35m, a source said.

“It smells like a strategic deal,” a source said.

Teasers on the sale went out in late February to early March, and the process is currently “passing round 1B, which is before any due diligence”, a source said.

LANXESS’ water treatment business is its Liquid Purification Technologies (LPT) business unit which sits its Performance Chemicals segment. LPT produces ion exchange resins as well as RO membranes.

Bank of America is running the sales process, a source said. Bank of America could not be immediately reached for comment.