April 1 2018, David R Brown
Blackstone is preparing to sell leading Australian chemical distributor Ixom in dual-track sale process
Global buyout firm Blackstone Private Equity is ready to test buyer interest in its Australian and New Zealand chemicals business. Ixom, which was formerly Orica's chemicals division, is expected to be worth around AUD 1.2 billion. Investment bank JP Morgan is reported to have been appointed to run a dual-track sale process for Ixom, exploring both sale and IPO options.
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Ixom reported AUD 1.2 billion revenue and AUD 288.3 million gross profit in the year to September 2017 and AUD 52.1 million net profit. The company manufactures, imports and trades chemicals for the agriculture, building and construction and oil and gas sectors, among others. Its business is predominantly in Australia and New Zealand but also has a presence in Asia, Latin America and the United States.
Blackstone bought Ixom for $750 million at the end of 2014. It is believed to be seeking more than $1 billion for the unit, based on a EBITDA of about AUD 130 million, sources said. JP Morgan advised Blackstone on the acquisition in 2014 while Citi, Goldman Sachs and Lazard ran the sale for Orica. If floated, the IPO would be one of the largest in Australia this year. Blackstone shelved plans to float the business last year at a time when private equity exits were out of favour with listed market investors.
However, Blackstone are more hopeful there will be strong private equity interest in a sale now, given the lack of AUD 1.0 billion-plus opportunities in the Australian market. It knows big global private equity firms are struggling to find targets, at a time when they they have cash to invest. Private interest is also expected from local Australian players which could include Wesfarmers, Incitec Pivot and Caltex, as well as large offshore groups such as ChemChina and maybe other multinational chemical distributors.
Ixom commenced as a standalone business on 2 March 2015, separating from Orica Australia Pty Ltd and for the year ending in September 2017 reported sales revenues of AUD 1.2 billion. With more than 1,000 employees globally, Ixom is the market leader in water treatment and chemical distribution in Australia and New Zealand, with a growing presence in North and South America and Asia. Ixom supplies to a wide variety of industries including Agriculture, Building & Construction, Chemical Process & Synthesis, Food &Nutrition, Home Care, Mining, Oil & Gas, Personal Care, Pharmaceuticals, Plastics, Pulp & Paper and Water Treatment.
Source(s): Chemagility Sources