U.S. Food Preservatives Maker Niacet Corp Said to Seek Buyerby
Calcium propionate supplier could be worth about $350 million
Family-owned company is being advised by Valence Group
Niacet Corp., a U.S. family-owned supplier of chemicals for the food and drug industries, has attracted preliminary bids for a sale of the whole company, according to people with knowledge of the situation.
Private equity firms and strategic buyers are submitting first-round offers for the 92-year-old maker of additives like calcium propionate and acetates, said the people, who asked not to be identified because details of the sale are private. Niagara Falls, NY-based Niacet could be worth more than $350 million, one of the people said.
Niacet, whose competitors include Kemira Oyj, BASF SE and Cargill Inc., is benefiting from increasing demand from the food industry as consumers spend more on ready-made meals and products with longer shelf lives. The calcium propionate market is forecast to grow to $480.3 million by 2023, compared with $312.6 million in 2014, according to a report by Transparency Market Research. The preservative is used in bread and animal feed.
Niacet has annual earnings before interest, taxes, depreciation and amortization of about $35 million, the people said. It could sell for about 10 times that figure, one of the people said.
The company started out in 1924 in Niagara Falls as a chemical plant making acetylene, according to its website. In 1978, Union Carbide Corp. executive Michael Brannen acquired the site, which was barely profitable and about to be shut down. Renamed Niacet Corporation, it acquired a Dutch business from Kemira of Finland in 2013 for 82 million euros ($92 million) as part of a strategy to expand outside the U.S.
Valence Group is advising Niacet on the sale, according to the people. A spokesperson for Niacet could not be reached for immediate comment while a spokesman for Valence declined to comment.