Reuters: Private Equity: H.C.Starck owners mulling sale or IPO -sources

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H.C.Starck owners mulling sale or IPO -sources Mar 23rd 2012, 12:20 FRANKFURT, March 23 | Fri Mar 23, 2012 8:20am EDT FRANKFURT, March 23 (Reuters) - A flotation of German specialist metals and ceramics company H.C. Starck is no longer the preferred option now that its owners are speeding up preparations to sell the group, three sources close to the transaction told Reuters. "IPO plans are taking a back seat," a financial source said. Two other people close to the matter said that a so called "dual track" process - in which an owner seeks to either list or sell the company - is being prepared. "First talks have taken place," the person added. Last year, H.C. Starck's owners - private equity groups Advent and Carlyle - planned to float the group and picked Deutsche Bank, Goldman Sachs and UBS to organise the listing. But the euro zone debt crisis scuppered the project as investors were unwilling to buy shares in volatile markets. H.C. Starck's owners are likely to decide within a couple of weeks whether to pursue a trade sale or an IPO, two sources said. Dual track processes are often used to extract a maximum price as the seller can always opt to float the business if it deems bids as too low. Big chemicals groups like BASF trade at about five times operating earnings. At the same multiple H.C. Starck would be worth roughly 1 billion euros ($1.3 billion). Strategic players and big private equity groups are eyeing H.C. Starck, the sources said. H.C. Starck's peers include Austrian group Plansee, German Ceramtec, Swiss-based Sulzer Metco, Brasilian CBMM and the Australian group Global Advanced Metals. Belgian Umicore had been in talks to buy H.C. Starck - in 2006 and then a few years later - but could not agree on a price tag, two sources said. "There was a bidding process, we were part of that process (in 2006) but didn't make it to the final round, and there's not been any more activity on that front since," a Umicore spokesman said. EARNINGS DOUBLE In 2011, H.C. Starck's sales increased by 28 percent to 883 million euros, the company said on Friday. Earnings before interest, taxes, depreciation and amortization almost doubled to roughly 190 million euros from 100 million in 2010, two sources close to the company said. "We want to build on our market positions and use our technical expertise to develop new products and branch out into new markets," Chief Executive Andreas Meier said in a statement. Advent and Carlyle bought the maker of refractory metals and advanced ceramics, which are used in computers and mobile phones, for 1.2 billion euros from Bayer in 2007. Advent, Carlyle, H.C. Starck and the banks declined to comment. Link this Share this Digg this Email Reprints

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