Having reported last month that a 51% majority stake in Baosteel Gases was available for purchase, with Hangzhou Hangyang reportedly keen to pursue this investment, gasworld understands that private equity fund PAG has won the bidding for the company.
An auction was recently conducted in which PAG, as well as Air Products and Hangyang were also invited to bid.
PAG is understood to have won the bid at a rumoured multiple of 15x EBITDA, but no official figures nor details of the deal have yet been released.
gasworld reported on 23rd July that Baosteel Gases wanted to sell 51% of the shares of its gas business through the Shanghai United Assets and Equity Exchange on a competitive bid basis. The company had set the lowest acceptable bid at RMB 1.9bn.
Baosteel Gases has business in air gases from cryogenic air separation plants (ASUs), synthetic gases, hydrogen, clean energy gases, and packaged gases. At present, it has more than 1,000 employees and 30 branch companies and subsidiaries.
A wholly state-owned-enterprise directly under Baosteel Metal Co. Ltd, a subsidiary of China’s Baowu Steel Group, Baosteel Gases was established in 2010 and though the industrial gases business has proven to be both profitable and promising for the company, Baowu Steel Group now wants to keep the focus on its core business (steel).
Hangyang, the largest ASU manufacturer in China, was thought to be keen to pursue this majority stake in Baosteel Gases and expand the scope and market share of its business in China, but the news is now of PAG’s acquisition of the business.
The Hong Kong-based private equity company is also the current owner of Yingde Gases, having won the race to acquire China’s largest industrial gas producer in April last year (2017).
Yingde is the largest independent industrial gas supplier in the People’s Republic of China in terms of revenue. It produces, supplies and distributes a variety of industrial gas products to its onsite and merchant customers, with oxygen, nitrogen and argon the core products.
As a result of the auction of Baosteel Gases, Warburg Pincus, an investor in Boasteel Gases since 2014, will exit completely from the business within the 51% holding sold.