The Urethane Blog

TPG Looks At Options

TPG explores sale or IPO of chemical distributor Nexeo


Buyout firm TPG Capital Management LP is exploring a sale or initial public offering of Nexeo Solutions LLC, hoping a deal would value the U.S. chemical distribution company at close to $2 billion, including debt, according to people familiar with the matter.

TPG is interviewing investment banks to appoint financial advisers that will help determine whether it will make more money selling Nexeo outright as opposed to taking it public and then selling down shares, the people said this week.

Nexeo has annual earnings before interest, taxes, depreciation and amortization of $180 million, one of the people added.

The sources asked not to be identified because the deliberations are confidential. Nexeo did not immediately respond to a request for comment, while TPG declined to comment.

Woodlands, Texas-based Nexeo distributes chemicals, plastics and composite materials in the United States, Europe and China. The chemicals are used in a wide range of industries including personal care, oil and gas exploration and production and aircraft de-icing.

Chemicals producer Ashland Inc (ASH.N), maker of popular automotive oil Valvoline, sold Nexeo to TPG in 2011 for $979 million as part of an effort to shift focus to higher-margin specialty chemicals. Ashland is currently in the midst of a sale or spin-off of its Valvoline brand.

Univar Inc (UNVR.N), a Nexeo competitor based in Downers Grove, Illinois, went public earlier this year. Private equity firm CVC Capital Ltd took Univar private in 2007 for $2.1 billion. In 2010 CD&R acquired a 42.5 percent equity interest, leaving CVC with an equal stake and the remainder owned by management.

Temasek Holdings Pte, Singapore's state-owned investment company, invested in Univar right before it went public.