UPDATE 2-IK Investment plans sale of fire safety firm Minimax

Fri Nov 23, 2012 12:13pm EST

* Minimax's 2011 sales 1 bln euros, earnings 92.5 mln eur

* IK plans to pick banks for sale next year -sources

* Could attract Honeywell, United Technologies -sources

* IPO also an option for Minimax -source

By Arno Schuetze and Simon Meads

FRANKFURT/LONDON, Nov 23 (Reuters) - Private equity group IK Investment Partners is planning to sell Germany-based fire extinguisher maker Minimax, which generated 1 billion euros ($1.3 billion) in sales last year, sources said.

The private equity house, which focuses on buying mid-sized companies in Northern Europe, aims to pick advisory banks early next year and launch the sale process within the first half of the year, four people familiar with the matter said.

Minimax, which employs over 6,200 people and makes a range of fire extinguishing and detection systems, could attract U.S. technology groups Honeywell and United Technologies as well as rival private equity groups, two of the sources said.

The company posted earnings before interest, tax, depreciation and amortisation of 92.5 million euros in 2011 and sales of 995 million euros, company accounts showed.

Rival companies such as security firm Tyco, and Honeywell itself, trade at 7.8 times their earnings and Minimax could fetch more than 700 million euros on a similar valuation.

An initial public offering (IPO) of the business is also an option, one of the people said.

A spokeswoman for IK declined to comment.

IK bought Minimax in 2006 from Investcorp for an undisclosed amount, financing the deal with 530 million euros in bank lending, data from Thomson Reuters LPC showed.

At that point the company had revenues of under 500 million euros a year, but it has since grown considerably, taking over U.S. rival Viking Group in 2009.

It is now the world's third-largest fire equipment supplier, and market leader in the United States and China, generating the vast majority of sales from industrial fire protection systems.

The prospective sale comes at an important time for IK Investment Partners as it asks investors to back its latest buyout fund, for which it has raised about half of the 1.7 billion euros it is seeking.

However, recent efforts to sell companies have gone poorly. It was forced to shelve the sales of industrials firm Schenck Process, sports pitch maker Sport Group and glass manufacturer Flabeg when bids fell short of targets, sources said.

IK, with roots in the Nordic region, has also been at the centre of a long-running tax investigation by Sweden's Tax Agency, resulting in bills for hundreds of millions of dollars in back taxes for the firm's dealmakers.

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