LDC has mandated Rothschild to sell its UK refrigeration gases portfolio company A-Gas, said a source close to the situation and three sources familiar with the situation.
The sell-side is guiding potential buyers off GBP 30m EBITDA, the sources said. The company could fetch 8x-10x EBITDA, the source close and one of the sources familiar said.
A-Gas is likely to be marketed to private equity firms such as Montagu and 3i [LON:III], which have both looked at acquiring the company previously, the source familiar said. Montagu was in exclusive negotiations to acquire A-Gas in 2013, as reported by Debtwire, our sister publication.
The target reported GBP 93.5min sales and EBITDA of GBP 17.6m in 2015, down 21% and 43% when compared with 2013, according to Companies House filings. The decrease was mainly because of "lowering trading results" in Australia, the filings said. In 2015, the company reported GBP 21.5m sales in that country, down by 33% when compared with the prior year.
LDC acquired A-Gas in a management buyout from Growth Capital Partners for GBP 70m in 2011. Since then the company has made several acquisitions: Technochem, an Australian re-packer and distributor of refrigerant gases and services to the refrigeration industry for unspecified amount; SA Rural Agencies, an Australian manufacturer and supplier of fumigation products for AUD 15m; RemTec International, a US provider of environmental services specializing in eliminating ozone depletion and global warming; Coolgas, a US distributor of refrigerants and provider of refrigerant related services - all in 2012.
In June 2016, A-Gas acquired Rapid Recovery, the US provider of on-site recovery and cylinder services to the refrigeration and HVAC sectors, for an unspecified consideration.
A-Gas specilises in the lifecycle management of specialty chemicals such as refrigerant gasses, halon, fire protection and foam-blowing agents. The company offers a range of fluorinated as well as non-fluorinated refrigerants such as ammonia, hydrocarbons and CO2. Together with its secondary heat transfer fluids, oxygen free nitrogen (OFN) and trace-a-gas, A-Gas acts as a one-stop shop for all refrigeration and service gas needs.
LDC, Rothschild, Montagu and 3i declined to comment.
by Maryna Irkliyenko and Joao Grando