Is Private Equity Bidding for Infineum?


According to a March 23 report in Britains online newspaper Telegraph, several large private equity firms plan to submit offers for Infineum International Ltd., which the paper said is valued at up to 2.5 billion (U.S. $3.9 billion). The Telegraph, which did not cite any sources for its information, said the firms included Apollo Management, BC Partners, Carlyle Group, Cinven, Kohlberg Kravis Roberts and Vestar Capital Partners.

ExxonMobil Chemical and Shell Chemicals Ltd. earlier this month announced they had agreed to evaluate market interest and discuss the possible sale of Infineum International Ltd., their additives joint venture started in 1999, with several potential buyers.

A spokeswoman for ExxonMobil Chemical and Shells press officer each declined to comment to Lube Report about the information in the Telegraph article.

Some of the private equity firms mentioned have experience with chemical distributors or manufacturers in their portfolios.

An affiliate of Purchase, N.Y.-based Apollo Management owns thermoset resins producer Hexion Specialty Chemicals Inc., which is in the midst of the approval process for its $10.6 billion acquisition of Huntsman Corp. Lubricant and fuel additives are key applications for Huntsmans polyetheramines. They are used as carrier oils, detergents and dispersing agents in lubricant and fuel compositions. BASF is the other major global supplier of the chemical.

In July 2006, industrial and specialty chemicals distributor Brenntag GmbH announced that private equity firm Bain Capital had sold its Brenntag investment to the funds advised by BC Partners. According to BC Partners, the acquisition resulted in a 5.3 billion ($8.3 billion) turnover. Brenntag distributes specialty chemicals for a variety of industries and products, including lubricants. BC Partners operates through teams based in Geneva, Hamburg, London, Milan and Paris.

One of New York-headquartered Kohlberg Kravis Roberts current investments is Princeton, N.J.-based Rockwood Holdings Inc., which is a specialty chemicals and advanced materials company focused on niche markets in three segments: specialty chemicals, pigments and additives, and advanced materials. One of Rockwoods business units is Rockwood Additives Ltd., which manufactures Fulcat, a chemically modified smectite clay catalyst employed in alkylation processes to produce fuel additives and related products.

Formed in January 1999, Infineum is a fifty-fifty joint venture between ExxonMobil and Shell that brought together their respective additives divisions – Paramins and Shell Additives. The joint venture started with 2,000 employees. Infineum is headquartered in Milton Hill, United Kingdom, and has regional business and technology centers in Linden, N.J., the U.K. and Singapore.

In a December 2004 press release, Infineum referred to itself as a $1.5 billion company. ExxonMobil and Shell do not issue separate earnings reports for the joint venture.

Infineum is a developer, manufacturer and marketer of lubricant additives used primarily in automotive, heavy-duty diesel and marine engines, along with additives for fuels and refineries. Its customers are oil companies and other lubricant and fuel marketers worldwide. The product line also includes specialty lubricant additives for two- and four-stroke engines, automotive transmission fluids, gear and industrial oils.

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