Opengate Is Said to Explore Sale of PVC Additives Maker Nakan

(Bloomberg) -- Opengate Capital LLC is exploring the sale of a plastic compounds business valued at about 350 million euros ($435 million), according to people with knowledge of the situation.

The private equity firm is working with an adviser to assess options for France’s closely held Nakan, said the people, who asked not to be identified because the deliberations are confidential. The business is estimated to generate 40 million euros in earnings before interest, taxes, depreciation and amortization, they said. A representative of Opengate didn’t respond to a request for comment.

Opengate stepped in to buy Nakan in 2015 after a tumultuous separation from its original owner Arkema SA. Industrial investor Gary Klesch had bought the assets in 2012 via a carve out from Arkema in a transaction that quickly soured, ending in court amid allegations that the seller didn’t provide accurate financial information. Klesch’s deal was among the first polyvinyl chloride- or PVC-related transactions, helping consolidate a market beset with overcapacity.

Margins in PVC have since improved, with buoyant demand from automotive markets. Nakan’s compounds are used widely in items from car-window seals to catheters to shoe soles. Nakan is also the brand name in the vinyl record business that’s enjoyed a revival among music lovers. The company produces compounds to make about a quarter of all discs sold.

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