NOVA Chemicals, the Calgary, Canada-based chemicals company, is collecting initial bids for its expandable styrenics unit next week, said three sources familiar with the situation.
Two of the sources said the asset has drawn strong interest initially from suitors signed up to participate in the process.
In April, this news service reported that NOVA has retained TD Securities to sell its expandable styrenics business. NOVA is backed by Abu Dhabi’s sovereign wealth fund Mubadala Investment.
NOVA launched the divestiture in mid-April, sending teasers to a broad group of global suitors comprised of financial sponsors and strategics, as reported.
The unit generates around USD 250m in sales, on average, with about 20% in gross margins, it was further reported.
Expandable polystyrene (EPS) technologies and Arcel are key products under the expandable styrenics unit, with Arcel growing faster than EPS.
NOVA is looking to monetize this unit because it is a non-core business for the company. NOVA does not have any “desperate” need to raise cash and it has other organic projects to focus on including in Canada, Mergermarket reported previously.
Abu Dhabi’s International Petroleum Investment Co. acquired heavily-indebted NOVA Chemicals in 2009. IPIC ultimately merged with Mubadala in 2017.
NOVA did not respond to a request for comment.