SK Capital Is Said to Pursue Deal for Clariant Pigments Unit

SK Capital Partners is in talks to acquire Swiss chemical giant Clariant AG’s pigments business, according to people familiar with the matter, potentially bringing an end to a lengthy sales process that stalled amid the Covid-19 crisis.

The private equity firm is in bilateral discussions with Clariant after other suitors dropped out of the bidding, the people said, asking not to be identified discussing confidential information.

The disposal forms part of Clariant’s plans to streamline its portfolio and focus on higher-value specialty chemicals. A sales process began prior to the onset of the pandemic only to be put on hold as economic conditions deteriorated. Since then the unit, which produces colorants for everything from architectural coatings to fabric care products, has seen costs linked to the procurement and transportation of raw materials rise significantly.

Clariant and SK Capital are still negotiating price and there’s no certainty they’ll reach an agreement, according to the people. Clariant could still decide against a sale if it deems the value too low or other bidders could still reemerge, the people said.

A representative for Clariant declined to comment, while a spokesperson for SK Capital didn’t immediately respond to request for comment.

Clariant said last year that it was looking to cut about 1,000 jobs, with a third of reductions affecting services teams and regional operations coming from divestments. Since 2019, it has sold both its health-care packaging and Masterbatches businesses.

Shares in the company rose as much as 3.4% in Zurich on Wednesday, the biggest intraday jump in more than three months. The stock has risen 7.8% over the last 12 months, giving Clariant a market value of 6.6 billion Swiss francs ($7.1 billion).

New York-based SK Capital managed assets of about $5.5 billion as of December and targets deals in the specialty materials, chemicals and pharmaceuticals sectors, according to its website.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.