Private equity duo bid for agrichemicals business Cheminova, say sources-Reuters

(Reuters) – Buyout groups EQT and CVC have made a joint bid to buy crop-protection company Cheminova in a deal that could be worth about 1 billion euros ($1.3 billion), two sources familiar with the deal told Reuters.

The two private equity groups submitted an offer this week before expiry of a deadline set by Cheminova’s owner Auriga Industries, the sources said.
United States-based FMC Corp has also expressed interest in the business, one of the sources said, while another source said that Asian groups have also been circling.

The bid from EQT and CVC values Cheminova at about eight to nine times its expected 2014 earnings before interest, tax, depreciation, and amortisation (EBITDA) of 120 million euros, the sources said.

Auriga, EQT and CVC declined to comment, while FMC was not immediately available for comment.

Cheminova, which develops and supplies crop-protection products to increase the yield and quality of crops, posted a 14 percent rise in EBITDA to 305 million Danish crowns ($53 million) in the second quarter on sales up 3 percent to 1.9 billion crowns.

It says it has about 2-3 percent of the global market share and operates out of more than 20 countries.

Makers of weedkillers have experienced higher second-quarter demand than usual from the United States, as farmers rush to cultivate fields after a long winter, while fungicide producers have benefited from increased demand from Asia.

Banking sources have said that EQT and CVC have lined up debt financing of 720 million euros to back a potential acquisition of Cheminova.

Auriga Industries, which announced in June that it had begun a review of its strategic options for Cheminova, is being advised by JP Morgan.
Cheminova represents the only business of holding company Auriga, which is expected to delist after the sale. Aarhus University is its largest shareholder, with a stake of nearly 40 percent, according to Reuters data.