Rhone Capital LLC is in advanced talks to acquire a German chemical joint venture owned by Ashland Inc. (ASH) and Clariant AG (CLN) valued at about 250 million euros ($344 million), according to people with knowledge of the situation.
Rhone is the frontrunner in a sale process for ASK Chemicals that began last year, said the people, who asked not to be identified because details of the auction are private. Other suitors have expressed an interest in the asset, which makes foundry chemicals, and a decision is expected within days, they said.
For the New York-based private equity firm, ASK is an opportunity to break into a niche industry dominated by large competitors including Vesuvius Plc (VSVS) of the U.K. and China’s Shengquan Group. The Hilden, Germany based business has 20 production plants and 1,700 workers.
Covington, Kentucky-based Ashland formed the joint venture in 2010 with Sued Chemie, which got bought by Muttenz, Switzerland-based Clariant in 2011 for about $2.5 billion. Its resins and urethanes are used in filters, coatings and castings including wood protection and preservatives.
Rhone has lined up loans to back the purchase from a group of lenders, according to two of the people. The facility will comprise two term loans, a capital expenditure portion and a credit line, they said.
Spokespeople for Rhone, Clariant and Ashland declined to comment on the deal. ASK didn’t immediately respond to telephone and email requests seeking comment on the purchase.
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