The company has increased sales significantly during the pandemic.
(Photo: dpa)
Frankfurt According to financial circles, the disinfectant manufacturer Schülke is being prepared for sale by its private equity owner. Financial investor EQT has hired investment bank Bank of America to review options for the $1.5 billion firm, people familiar with the matter said.
Schülke’s business had grown significantly during the Covid pandemic, EQT itself has only been the owner since 2020. Other financial investors are considered to be potential buyers. EQT and Bank of America declined to comment. The company from Norderstedt near Hamburg itself was initially unavailable.
It is currently unclear whether the sales process can start before the summer break: the challenging financing climate on the markets is making it difficult for potential buyers to look for a loan.
Under the aegis of EQT, Schülke has roughly doubled its operating result (Ebitda) to around EUR 100 million this year. The turnover is around 400 million euros, the number of employees is more than 1250.
In the event of a sale, Schülke could be valued at more than 15 times its Ebitda, i.e. a good 1.5 billion euros, according to financial circles. Competitor Ecolab is trading at 17 times its expected Ebitda on the stock exchange.
Started with Sagrotan, then sold the brand
On the one hand, Schülke sells end customer products such as Octenisept skin disinfectants. However, part of the business also includes infection prevention agents for the medical sector or for the pharmaceutical industry and food processing companies.
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The Schülke & Mayr company was founded in Hamburg in 1889 as one of the first disinfectant manufacturers and sold products under the Sagrotan brand from 1913. From 1966 Schülke was part of various groups – first the US companies Sterling Drug and Eastman Kodak, then the British Reckitt & Colman (today Reckitt Benckiser) and from 1996 the French gas group Air Liquide. The Sagrotan brand went to the consumer goods group Reckitt Benckiser in 1997.
Shortly before the outbreak of the pandemic, Air Liquide decided to sell the subsidiary, which was no longer part of its core business, and sold Schülke to EQT in 2020 for a good 900 million euros. Under the aegis of the private equity owner, Schülke then sold his body care products business to the American chemical group Ashland for 262 million euros in 2021.
After long boom years in private equity, the market for company acquisitions by financial investors has recently cooled off significantly. In these deals, investment funds buy parts of groups or medium-sized companies, rebuild them and sell them on after several years or list them on the stock exchange.
But the rapid turnaround in interest rates by the central banks has major consequences for the industry. Borrowed capital for such deals is difficult to obtain or only on terms that make it difficult for financial investors to achieve the desired returns of around 25 percent.
More: Takeovers in medium-sized companies instead of spectacular billion-dollar deals