Belgian multinational Solvay is expected to receive bids for Coatis in the coming weeks, sources say. The solvents division, which has headquarters and manufacturing activities in Brazil, has drawn interest from investment funds operating in the country, in addition to foreign competitors.
The business is valued at about R$2 billion and is the target of interest of private-equity firm Advent, which has investments in the chemical industry, U.S.-based Altivia and Asian Indorama, which already owns Oxiteno. Lazard, which is advising Solvay, is expected to receive bids by the end of April.
With net sales of €745 million last year, up 58.6% from 2020, Coatis is growing fast, driven by higher chemical prices and increasingly robust demand for green oxygenated solvent Augeo. This family of solvents, obtained from a renewable source (glycerin), replaces petroleum-based products and is used mainly in cleaning products and air fresheners, fragrances and personal care items. Most of the production is exported.
This business division of Solvay, which owns Rhodia, is also one of the world’s largest producers of phenol and polyamide products and intermediates, representing the group’s main business in Latin America.
Coatis is on the block as the group plans to split businesses into two independent, public companies in order to “enhance strategic focus and unlock growth opportunities,” according to the group’s announcement.
Three weeks ago, Solvay said it intends to bring its soda ash, peroxides and silica businesses, as well as Coatis, under the first new company, “EssentialCo.” The second, “SpecialtyCo,” will bring together specialty polymers, high-performance composites and most of the Solutions portfolio, which includes the Novecare, Technology Solutions, Aroma Performance and Oil & Gas units.
The group has been moving out of niche markets for some time now. About five years ago, it began a comprehensive restructuring of its assets and divested different businesses globally, with the aim of concentrating on specialty chemicals and advanced materials.
In the process, it significantly reduced its stake in the PVC business and sold operations in Europe, Asia and Latin America – Brazilian Unipar acquired Solvay Indupa, which produces PVC in Brazil and Argentina. In the following years, it continued to divest assets while struggling with high debt.
The Brazilian petrochemical industry has been going through an internationalization drive in recent months. The main asset of the sector is petrochemical company Braskem, which is up for sale. Controlled by Novonor (formerly known as Odebrecht) and oil giant Petrobras, the company has drawn the interest of the U.S. asset manager Apollo – Brazilian group Unipar and J&F, the holding company of the Batista brothers, owners of meatpacker JBS, are also in the race, as reported by Valor. Furthermore, BTG Pactual is still committed to the proposal of buying Novonor’s debt, which is guaranteed by Braskem shares.
Last week, the Asian Indorama concluded the acquisition of Oxiteno, a chemical division formerly owned by the Brazilian company Ultra. Best known in Brazil for its leadership in the PET resin market, used in plastic bottles, Indorama Ventures disbursed $1.48 billion and reached the top of the ranking among ethylene oxide and surfactants producers in the Americas.
Advent, Lazard and Solvay declined to comment. Altivia did not immediately reply to a request for comment.