Nalco Files to Go Public

Less than a year after it was bought for $4.2 billion by a consortium of investors from France's Suez, water treatment chemicals maker Nalco has filed a preliminary prospectus with the Securities & Exchange Commission (SEC) to raise as much as $800 million from the sale of stock and debt.

The firm, which is also seeking a New York Stock Exchange listing, says it will use some proceeds to pay a dividend to investors, led by the Blackstone Group, who bought the firm in November 2003. It will use other funds for "general corporate purposes" and to redeem outstanding debt that exceeds $3.6 billion.

The filing does not say how many shares will be offered to the public. But Blackstone and its partners, Apollo Management and Goldman Sachs Capital Partners, will continue to hold a controlling interest in Nalco once SEC approves the offering and the firm moves ahead with its plans.

William H. Joyce, who left Hercules last fall to become Nalco's CEO, recently said that Nalco was making progress in paring costs and obtaining price increases from customers.

Discussing the firm's net loss of $106 million on sales of $1.5 billion for the first half of 2004, Joyce reported that "our businesses are gaining momentum. We are obtaining and holding price increases and have more to do in this area. We expect to exceed our commitment to take $75 million in costs out this year from back-office activities while expanding our investment in sales engineers and targeted research programs."

According to the prospectus, Nalco has a 19% share of the $5.3 billion global industrial and institutional water treatment market, a 25% share of the $2.9 billion market to service energy producers, and a 9% share of the $617 million market for services to papermakers.