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Banks mandated for U.S. listing of German chemicals group Atotech - sources

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Banks mandated for U.S. listing of German chemicals group Atotech - sources
The logo of the Carlyle Group is displayed at the company's office in Tokyo, Japan October 17, 2018. REUTERS/Issei Kato   -   Copyright  ISSEI KATO(Reuters)
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By Arno Schuetze and Joshua Franklin

FRANKFURT/NEW YORK (Reuters) – Buyout group Carlyle <CG.O> has picked four banks to lead the U.S. stock market listing of German speciality chemicals group Atotech, a former part of oil group Total <TOTF.PA>, people close to the matter said.

Bank of America <BAC.N>, Citi <C.N>, Credit Suisse <CSGN.S>, JP Morgan <JPM.N> have been chosen to organise the initial public offering, which is expected to take place as early as the second quarter of 2019, the people said.

Carlyle and the banks declined to comment.

Atotech, a Berlin-based maker of speciality chemicals and equipment for printed circuit boards and semiconductors, posted adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $329 million on sales of $1.2 billion last year.

Carlyle bought Atotech in 2016 at an enterprise value of $3.2 billion or 12 times its core earnings.

While an offer size has not been decided yet, a share issue of about $600 million has been discussed in initial meetings with banks, one of the sources said.

The company could be valued at around $5 billion, or 13 to 14 times Atotech’s expected core profit of up to $400 million, people said earlier this year.

The valuations of U.S.-listed peers such as Cabot Microelectronics <CCMP.O>, Entegris <ENTG.O>, Quaker Chemical <KWR.N> and Versum Materials <VSM.N> have, however, come down recently and they now trade at only 8.5 to 10 times their expected core earnings.

That is putting pressure on Atotech’s potential valuation, which may as a result end up lower, the people said.

While a listing in New York is seen as the most likely exit route, Carlyle will also consider potential bids from chemicals groups or other investors, people close to the matter have said.

(Editing by Maria Sheahan)

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