DSM launches sale of anti-infectives maker DSP – sources

DSP is a joint venture with China's Sinochem, which acquired half of DSM's pharma activities unit DAI in 2011.

REUTERS
Advt.

By Ludwig Burger and Arno Schuetze

FRANKFURT, – Dutch speciality chemicals company DSM has launched the sale of its anti-infectives unit DSM Sinochem Pharmaceuticals (DSP), a potential 640 million euro ($785 million) deal, as it seeks to streamline its portfolio, people close to the matter said.

DSP is a joint venture with China’s Sinochem, which acquired half of DSM’s pharma activities unit DAI in 2011.

DSM is working with Rothschild on the divestiture, the sources said. First-round bids were due earlier this week, and DSP is expected to attract the interest of private equity groups such as CVC, BC Partners, Bain, Charterhouse and SK Capital, one of the people said.

Sinochem has a right of first refusal but has signalled it will sell out, too, the people said.

DSP is expected to post earnings before interest, tax, depreciation and amortisation of roughly 80 million euros this year, and could be valued at at least 8 times that in a potential sale. Last year, its core profit was 73 million euros.

DSM is working towards a sale of a number of jointly owned ventures, also known as associates, which include businesses co-owned with U.S. biofuels maker POET or CVC, DSM finance chief Geraldine Matchett told analysts on an earnings call last month.

“And for DSP, it’s been a very solid year both in terms of growth and retaining the margin. So no clarifications on timing, except that directionally that is where we want to be heading with our associates,” she said.

DSM has been focusing on products such as vitamins and enzymes as well as fabrics and plastics used in cars, garments and construction, putting more commoditised and cyclical product lines into joint ventures with the view to eventually exiting those businesses.

DSM, Sinochem, Rothschild and the bidders declined to comment or were not immediately available for comment. ($1 = 0.8155 euros) (Additional reporting by Toby Sterling and Chen Aizhu Editing by Maria Sheahan)

LEAVE A REPLY

Please enter your comment!
Please enter your name here