PAI revives exit plans for Swedish chemicals group Perstorp

The Paris-based private equity firm invited investment banks to pitch for the sale mandate in recent weeks, according to three of the sources, with one adding that Goldman Sachs has since been retained to guide a process.

Options being explored by PAI include a sale to an industry player or an initial public offering, three of the sources said. Any flotation of Malmö-headquartered Perstorp is likely to take place on a Nordic stock exchange, one of the sources said.

A process is expected to launch formally in the coming weeks, the sources added.

The move to revisit an exit follows years of deliberations about a potential transaction involving Perstorp, which was acquired by PAI for SEK 9.2bn (USD 1.01bn) in 2005.

Two of the sources said the PE firm has been sounding out banks over the past 12 months to solicit advice on when to launch a process. As recently as 2015, PAI was discussing a listing of Perstorp in Stockholm that could have valued the business in excess of EUR 1.5bn (USD 1.7bn).

The business, whose chemistry includes resins, coatings and polymers, as well as additives for animal feed, generated EBITDA of SEK 1.8bn (USD 199m) from sales of SEK 9.6bn (USD 1.06bn) for the nine months to September 2021. In the event of a sale, Perstorp could fetch between 9-12x core earnings, one of the sources and a sector adviser noted.

As environmental, social and governance (ESG) credentials become more influential, any buyers that express interest in Perstorp are likely to weigh up the business's long-term ownership and whether they can act as a custodian in the years to come, two of the sources said. The carry of ESG could make an IPO more favourable to PAI than a sale, with a public market home setting Perstorp up for longer-term success, one of them said.

Some advisers view Perstorp as a suitable merger candidate for OQ Chemicals, the German chemicals business of Oman's state energy company OQ SAOC, according to two of the sources and the adviser. OQ is said to be speaking with potential advisers as it weighs options for the unit, formerly known as Oxea.

More than USD 42bn was spent on speciality chemicals targets globally in 2021, Dealogic data shows.

Representatives for PAI Partners and Perstorp declined to comment. Goldman Sachs did not respond to requests for comment.

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