Buyout firms battle for Armacell: bankers

LONDON Tue Mar 5, 2013 7:37am EST

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LONDON (Reuters) - A few buyers are left in the running for German insulation firm Armacell after Goldman Sachs Private Equity and Equistone dropped out of the auction process, banking sources said on Tuesday.

Private equity firms Charterhouse, HgCapital and Pamplona are preparing to submit second round bids for Armacell on March 11, banking sources said. Another private equity house and trade buyer could also submit bids, banking sources added.

Armacell is expected to fetch up to 500 million euros ($650.47 million).

The company is being sold by Bahrain-based private equity owner Investcorp, which acquired Armacell in 2007 backed with 382.5 million euros of debt, Thomson Reuters LPC data shows.

HgCapital, Investcorp and Pamplona were not immediately available to comment. Equistone, Charterhouse and Goldman Sachs Private Equity declined to comment.

Bankers are putting together debt packages of around 350- 400 million euros to back a buyout should it go to a buyout house, or 5 to 5.5 times Armacell's approximate 70 million euro EBITDA.

Senior leveraged loans, mezzanine debt and high yield bonds are all being considered, denominated in both euros and dollars, bankers said.

Germany-headquartered Armacell says it is the world's largest maker of flexible insulation, claiming 40 percent of the market, with its products used to lag pipes and ductwork in large buildings such as factories and schools.

The company has approximately 2,440 employees and 19 factories in 13 countries and had annual sales of around 448 million euros in 2011. ($1 = 0.7687 euros)

(Reporting by Claire Ruckin; Editing by Helen Massy-Beresford)

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