* U.S. seen as most likely venue for IPO -sources
* Atotech peers trade at 11-15 times core earnings
* Atotech posted EBITDA of $329 million in 2017 (Adds valuation, background)
FRANKFURT, Aug 14 (Reuters) - Buyout group Carlyle is starting preparations for a stock market listing of German speciality chemicals group Atotech, a former part of oil group Total which could be valued at around $5 billion, people close to the matter said.
The private equity investor has asked investment banks to pitch for roles in an initial public offering which is expected to take place in New York next year, two of the people said, while another person said a German IPO was also a possibility.
Carlyle declined to comment.
Atotech, a Berlin-based maker of speciality chemicals and equipment for printed circuit boards and semiconductors, posted adjusted earnings before interest, tax, depreciation and amortisation of $329 million on sales of $1.2 billion last year.
Carlyle bought Atotech in 2016 at an enterprise value of $3.2 billion or 12 times its core earnings.
The investor would likely seek a valuation of at least 13-14 times Atotech's expected core profit of up to $400 million, or roughly $5 billion, two of the people said.
U.S.-listed peers such as Cabot Microelectronics, Entegris, Quaker Chemical and Versum Materials trade at 11-15 times their expected core earnings.
"For Carlyle, it's about taking some money off the table and using a window of opportunity ahead of a potential correction of stock markets," one of the people said, adding that the deal could take place in the second quarter, based on 2018 earnings.
Earlier this year, Atotech increased its debt by $500 million to pay its owners a special dividend of the same amount.
While a listing is seen as the most likely exit route, Carlyle will also consider potential bids from chemicals groups or other investors, the people said.
At the time of Carlyle's buyout, peers such as Umicore and Sinochem showed interest in the firm which is specialised in metallization, panel plating and corrosion protection.
Atotech, which was founded in 1993 through a merger of Elf Atochem M&T Harshaw and Scherings electroplating division, employs more than 4,000 staff. Elf Aquitaine was later renamed Total after it merger with Totalfina, and it agreed to sell Atotech as part of a $10 billion asset disposal programme. (Reporting by Arno Schuetze Editing by Maria Sheahan and Keith Weir)