Macquarie Infrastructure and Real Assets (MIRA) is understood to be in exclusive talks to buy Bayer’s 60% stake in German chemicals storage company Currenta, in a deal expected to take longer than usual to complete because of the business’ pension liabilities and the position of its minority shareholder.
The manager is believed to have entered into exclusive negotiations with the seller, according to two well-placed sources, having edged out DWS and KKR to be the frontrunner in acquiring a majority stake in the Leverkusen-headquartered business owned by the German pharmaceutical group.
Although negotiations started three weeks ago an official preferred bidder for the business – which operates Chempark, the largest chemical park in Germany – has yet to be chosen, said one of the sources.
Established in 2002, Currenta, which is being advised on the sale by Morgan Stanley, is a joint venture between Bayer (60%) and Cologne-based chemicals company Lanxess (40%), and operates Chempark’s three sites in Leverkusen, Dormagen and Krefeld-Uerdingen in western Germany.
Currenta has an enterprise value of over EUR 1.5bn and generated around EUR 200m in EBITDA last year, as reported. The deal will be structured with equity and a five-year bridge loan which will be later refinanced with a high-yield bond, according to a well-placed source.
Barclays, Deutsche Bank and KommunalKredit are understood to have been in talks with some or all of MIRA, DWS and KKR after the three teams were shortlisted last year for the 60% stake in the Leverkusen-headquartered business. However, there are currently no ongoing discussions between Macquarie and the banks for unknown reasons, said an insider.
One banker said that he was put off from lending as the park has just one key client – Bayer.
“The asset has a lot of things to do with infrastructure but it has only one core customers. Therefore you are taking large customer risk for a long time,” the person said.
The deal is believed to be complex and will take longer to complete than average, said a source. One of the issues is Currenta’s pension liabilities, which are believed to be partly unfunded, and could limit the amount of additional debt which the incoming shareholder can place on the business, a source said.
Another issue is that the subsidiaries of the minority shareholder Lanxess are clients of Bayer as they use Chempark, with any incoming shareholder needing to secure Lanxess’ rights.
Currenta’s circa 70 clients operate out of Chempark’s three sites and provide long-term and stable returns, while the sites also have unused real estate that could be developed to attract additional clients, said the source.
MIRA, along with Goldman Sachs, agreed to acquire Rotterdam-headquartered bulk storage operator HES International for EUR 1.3bn – equivalent to around 13 times 2017 EBITDA – last April, with the deal set to reach financial close in the coming weeks.
In mid-2017, MIRA acquired Spanish oil storage and pipeline operator Compañia Logística de Hidrocarburos (CLH) from AMP Capital and Oman Oil Company. CLH operates more than 4,000km of oil pipeline and a storage capacity of over 8 million cubic metres in Spain.
Macquarie declined to comment.