Bain in exclusive talks to buy Rhiag: sources

LONDON Fri Jun 29, 2012 6:28am EDT

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LONDON (Reuters) - Private equity firm Bain Capital is in exclusive talks to buy Italian auto-parts distributor Rhiag from Alpha Associes in what could be the first Italian leveraged buyout (LBO) in more than a year, people close to the transaction said on Friday.

The sale could value Rhiag at over 500 million euros ($621 million) or over 6.25 times the company's roughly 80 million euros of earnings, the people said.

Bain declined to comment, while Alpha could not immediately be reached for comment.

The deal could be financed with debt of over 240 million euros or over 3 times earnings, provided by a club of European banks. However, banks have not yet underwritten the debt due to concerns about financing an LBO in Italy or other peripheral European countries, where a sovereign debt crisis has sapped deal making, the people added.

The last LBO in Italy was signed in May 2011 when BC Partners acquired Italian clothing retailer Gruppo Coin for 930 million euros.

Rhiag, which also generates revenues outside Italy, tried to list on the stock exchange in May 2011, but the initial public offering was pulled due to adverse market conditions. The IPO had valued the company at between 326.5 million and 398 million euros.

Alpha acquired Rhiag in a 2007 buyout. The deal was financed with 255 million euros of debt, provided by ING, Natixis, GE and IKB, according to Thomson Reuters LPC data.

(Reporting by Isabell Witt; Editing by Mark Potter)

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