CVC Capital Partners Is Said to Mull Sale of Resins Group AOC

(Bloomberg) -- CVC Capital Partners is weighing the sale of its composite-resins business AOC, according to people familiar with the matter.

The private equity firm is working with an adviser to explore options for AOC, said the people, who asked not to be identified discussing confidential information. CVC could seek at least $2 billion for the business, the people said.

Specialty resins are used in industrial settings to protect everything from wind-turbine blades to underground storage tanks. Such businesses have been in demand, with Covestro AG agreeing in September to buy Royal DSM NV’s coatings additives unit for 1.6 billion euros ($1.9 billion).

That deal valued the DSM business at about 12 times earnings before interest, taxes, depreciation and amortization. CVC may target a similar multiple for AOC, which has more than $200 million of annual Ebitda, according to the people.

Deliberations are at a very early stage, and CVC could still decide to keep the business, the people said. A representative for CVC declined to comment, while a spokesperson for AOC didn’t immediately respond to request for comment.

CVC has been steadily building its portfolio of resins operations by acquiring assets from companies including DSM. In 2018, it purchased Alpha Corp. of Collierville, Tennessee, bringing the well-known AOC brand into its group. Subsequent add-ons included Ashland Inc.’s maleic anhydride business, which it bought for $100 million.

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