K+S Group, Kassel, Germany, has shortlisted U.S. investment firm Meritage Group LP and private equity firms for the sale of its Americas Operating Unit, according to a Reuters report, citing undisclosed sources familiar with the matter. The operating unit consists of K+S’ North and South American salt businesses.
Meritage is partnering with the U.S. ice melt manufacturer and salt supplier for the bid, according to the report. Overland Park, Kan.-headquartered Kissner Group Holdings LP was acquired by buy-out group Stone Canyon Industries Holdings Inc. in April in a $2 billion deal.
Private equity firms Advent International, American Securities, and Cerberus Capital Management are also in the second bidding round, according to the report. Cerberus last month was reported to have shown interest in the K+S Americas Operating Unit, according to a Bloomberg report, citing Germany’s Frankfurter Allgemeine newspaper (GM July 17, p. 30).
In response to Green Markets’ inquiries this week, a spokesperson for K+S said the sale process is proceeding as planned and it remains the company’s goal to reach a sale agreement signing before the end of calendar year 2020. He said the high level of interest on the part of investors confirms the attractiveness of K+S’ American salt business. However, the spokesperson said he could not comment further on the ongoing sale process or comment on the companies mentioned in the report.
K+S first announced in March its intentions to sell the unit, and sees the sale as providing the company “with the greatest potential” for reducing more than €2 billion of its debt by the end of 2021 (GM March 13, p. 1).However, Warburg analyst Oliver Schwarz, in a note to clients last month cited in a Bloomberg report, warned that the COVID-19 pandemic has presented “headwinds” that are potentially “bad” for the divestment process and the prospective selling price.