FRANKFURT, March 30 (Reuters) - German chemicals group Bayer is preparing to launch an auction for its pest control unit Bayer Environmental Science (BES) seen worth more than 2 billion euros ($2.35 billion) in the summer, people close to the matter said.
The agrichemicals giant, which continues to deleverage in the wake of its $66 billion acquisition of U.S. peer Monsanto in 2016, is working with Bank of America on the BES divestiture, the people said.
While first introductory meetings with prospective buyers are already taking place, an auction will officially be kicked off just before or after the summer break with the view of signing a deal by year-end, they added.
Bayer and Bank of America declined to comment.
Bayer is planning to market the unit, which supplies products like pesticides for golf courses and rodent protection for warehouses, to peers such as Scotts Miracle-Gro, ICL as well as private equity groups, the people said.
BES is expected to post earnings before interest, tax, depreciation and amortization of about 200 million euros this year and could be valued at 10-12 times that, they added.
BES last year saw revenues increase by 7.6% to 1.1 billion euros, while most other units of Bayer’s CropScience division saw sales slump on weak trading in North America, Bayer said in its annual report published last month.
Since the Monsanto acquisition, Bayer has already sold its 6 billion euro animal health business, its stake in 3.5 billion chemical park Currenta, as well as consumer brands such as Dr. Scholl’s and Coppertone worth about 500 million each.
Its net debt still stood at 41.9 billion euros as of December 2020. ($1 = 0.8527 euros) (Reporting by Arno Schuetze Editing by Alexandra Hudson)