Investor group offloads shares in Evonik

By Jane Byrne

- Last updated on GMT

Investor group offloads shares in Evonik

Related tags Amino acids

Private equity group, CVC, has reduced in stake in amino acids producer, Evonik Industries.

The development comes as the German chemical company revealed earlier this week that its 2014 earnings were on target and that it was “poised for a new phase of profitable growth.”

And Evonik was also bullish about prospects for the year ahead - predicting a slight hike in profit for 2015 based on higher demand for feed additives, amino acids in particular.

CVC Capital Partners originally had a 25% stake in the animal feed additives and polymer producer but the investment group has been gradually offloading its shares in the company. On Wednesday it sold a 3.9% stake in Evonik, according to Reuters.

Last June, the RAG Foundation, a German public-sector trust, said it would reduce its 68% share in the chemical group the over the medium term, in a bid to diversify its investment risks.

In February this year, the Trust said it would issue a €400m ($452.24m) exchangeable bond which could be converted into a 2.2% Evonik stake.

Takeover target

Markus Mayer, an analyst at KeplerCheuvreux, told us a similar ‘back door’ move by the RAG Foundation in summer 2014 was aimed at avoiding the risk of share overhang and was "good news"​ for Evonik as it would bring more liquidity into trading volume and result in a broader share base with the potential to make the German chemical company a takeover target in the long run.

“Evonik is a large animal but most of the chemical giants would be interested in the biotechnology side of its business, which has massive growth potential. The amino acids segment is heavily commoditized and would not be attractive to potential buyers​,” said the analyst.

While the specialty materials segment of the Essen-headquartered firm would also be appealing to any chemical behemoth on the acquisition trail, Mayer said then that Evonik’s expertise in the use of microorganisms for biocatalytic and fermentative production processes would be the real draw.

Process breakthrough

In February, Evonik announced a breakthrough in its amino acid continuous chromatography process that is said to separate the amino acids from the fermentation broth with high selectivity, to increase product yields and the efficiency of the entire process.

A spokesperson for Evonik told us: “The process was developed for the purification of amino acids based on a biotechnology process and isolated in crystalline form. This means it has relevance for ThreAMINO and TrypAMINO.”  

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