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Carlyle taps Credit Suisse to explore $3 bln sale of PQ -sources

By Soyoung Kim and Greg Roumeliotis

NEW YORK, Dec 18 (Reuters) - Carlyle Group LP has hired Credit Suisse Group AG to explore a sale of specialty chemical company PQ Corp, which it is hoping to sell for as much as $3 billion, according to three people familiar with the matter.

Should Carlyle opt for an initial public offering, instead of an outright sale of PQ, Credit Suisse will lead the offering along with Bank of America Merrill Lynch and JPMorgan Chase & Co, the people added.

A dual-track process to explore both possibilities is expected to start in the first quarter of 2014, the people said, asking not to be named because the matter is not public.

A PQ spokesman did not respond to a request for comment while representatives for Carlyle and the investment banks declined to comment.

Acquired by Carlyle for $1.5 billion in 2007, PQ is a major producer of inorganic specialty chemicals for industrial and consumer markets, including sodium silicate, catalysts, reflective glass spheres and engineered glass materials.

Malvern, Pennsylvania-based PQ is estimated to have around $300 million in annual earnings before interest, tax, depreciation and amortization and could fetch up to 10 times that amount in a potential sale, Reuters reported earlier this month.

After its 2007 acquisition of PQ, Carlyle combined the company with industry peer INEOS Silicas, a division of petrochemical giant INEOS, to create a global producer of specialty chemicals, catalysts and engineered glass products. As part of the transaction, Carlyle retained a 60 percent stake in the newly combined company and INEOS the rest.

In 2011, PQ separated its engineered glass products subsidiary, Potters Industries, in order to pay down debt under its credit facility.

Were PQ to launch an IPO next year, it would be the next Carlyle portfolio company in the United States to go public, following telecommunications equipment maker CommScope Holdings Company Inc's $578 million IPO in October.

This followed the IPO of Carlyle's industrial supplies distributor HD Supply Holdings Inc in June, which raised $957.2 million.