Exclusive: Chemtrade in talks for $1 billion General Chemical deal - sources
Canada's Chemtrade Logistics Inc is in advanced talks to buy General Chemical Corp, two people familiar with the matter said on Wednesday, in a deal that could value the specialty chemicals maker at around $1 billion.
Private equity firm American Securities LLC, which put General Chemical on the auction block in the summer, is in the process of finalizing an agreement with Chemtrade over the next few weeks, one of the people said.
The discussions with Chemtrade are continuing and the outcome may yet change, the people cautioned. They asked not to be identified because the matter is not public.
American Securities has also held talks with other interested parties, including private equity firm Apollo Global Management LLC , the people added.
An acquisition of General Chemical would be transformational for Chemtrade, which has a market capitalization of just below $700 million and provides industrial chemicals and services to customers in North America and globally.
Representatives for Chemtrade and General Chemical did not immediately respond to requests for comment. American Securities and Apollo declined to comment.
Parsippany, New Jersey-based General Chemical, which provides water treatment products used by municipalities and ingredients used in prescription drugs, is working with Barclays Plc on the potential sale, Reuters reported in July.
General Chemical produces organic and inorganic chemicals for industries that also include food and beverage, pulp and paper, industrial processing and agriculture, according to American Securities' website.
American Securities took General Chemical private in 2009 for $673 million, including assumption of $262 million in debt and liabilities, according to a note at the time by Moody's Investors Service Inc.
Specialty chemicals companies can be appealing acquisition targets for companies looking to expand their offerings. Last year for example, buyout firm AEA Investors LP sold Houghton International Inc, a U.S. producer of metal-working fluids and other chemicals, to a unit of family-owned Indian conglomerate Hinduja Group for $1.05 billion.
(Reporting by Greg Roumeliotis and Soyoung Kim in New York; Editing by Leslie Adler)