Exclusive: Conoravirus outbreak delays Carlyle's Atotech
IPO - sources
Send a link to a friend
[February 01, 2020] By
Joshua Franklin and Arno Schuetze
NEW YORK/FRANKFURT (Reuters) - Buyout firm
Carlyle Group Inc <CG.O> has delayed the U.S. initial public offering
(IPO) of its German specialty chemicals group Atotech, concerned that
the coronavirus outbreak would negatively impact the valuation it could
achieve with investors, people familiar with the matter said on Friday.
Carlyle's decision highlights the uncertainty that the spread of the
virus in China and around the world has brought to financial markets,
with the benchmark S&P 500 Index <.SPX> on track for its worst week
since August.
Atotech, which makes specialty chemicals and equipment for printed
circuit boards and semiconductors, had planned to kick off its IPO
process this week by publishing an indicated price range.
However, Carlyle became concerned that Atotech's production and business
exposure in China, as well as the broader market volatility caused by
the outbreak, would hurt investor demand in the IPO, the sources said.
Atotech operates several manufacturing facilities in China, accounting
for 38% of the revenue in its chemistry segment, which in turn makes up
about 90% of its business, according to its IPO registration.
[to top of second column] |
The logo of the Carlyle Group is displayed at the company's office
in Tokyo, Japan October 17, 2018. REUTERS/Issei Kato
It could not be learned when Atotech was planning to resume its IPO
preparations. If the delay extends beyond Feb. 14, the company would
have to resubmit its IPO filing to U.S. regulators to include full-year
earnings, pushing back the process further.
The sources requested anonymity because the decision is confidential.
Atotech and Carlyle declined to comment on the IPO plans and on any
potential impact of the coronavirus outbreak on Atotech's business in
China.
To be sure, the window to go public is still open for companies with
less or no exposure to China. Household goods maker Reynolds Consumer
Products <REYN.O> and digital-focused healthcare provider 1Life
Healthcare Inc <ONEM.O>, which is also backed by Carlyle, successfully
completed IPOs this week.
Carlyle acquired Atotech in 2016 in a deal worth $3.2 billion, including
debt. The company was looking for a valuation of around $5 billion,
including debt, in its IPO, Reuters previously reported.
(Reporting by Joshua Franklin in New York and Arno Schuetze in
Frankfurt; Editing by Nick Zieminski)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |