Dow Today – IFF shortlists Lanxess, LSI in microbial control unit sale -sources
FRANKFURT (Reuters) – International Flavors & Fragrances has shortlisted Lanxess and private equity-owned LSI in the sale of its roughly $1.4 billion microbial control unit, people close to the matter said.
IFF, which supplies scents and tastes for products that are household names, in 2019 agreed to merge with DuPont’s $26 billion nutrition & biosciences unit, creating a new consumer giant.
This year it put the microbial control unit up for sale with the help of Bank of America as it seeks to shake off some assets inherited from the DuPont deal.
The microbial control unit, a former Dow business that became part of DuPont following the two companies’ merger and subsequent split, makes biocides used in the oil & gas industry as well as for water treatment and hygiene purposes.
The unit is expected to post core earnings of about $100 million this year and could be valued at 13-14 times that, the sources said.
Lanxess as well as Lonza Specialty Ingredients (LSI), acquired by buyout groups Bain and Cinven this year, both have similar businesses and are among the firms which have been asked to submit final bids by early August.
Malaysia’s Petronas and private equity firm New Mountain Capital initially also expressed interest in the IFF unit, but it remained unclear whether they remain in the running.
IFF, Bank of America and the bidders declined to comment or were not immediately available for comment.
Reporting by Arno Schuetze; editing by Jason Neely