RLPC-Bankers prep $1 bln debt to fund CeramTec buyout

LONDON, March 15 Fri Mar 15, 2013 11:12am EDT

LONDON, March 15 (Reuters) - Bankers are proposing debt packages of around 800 million euros ($1 billion) to private equity firms that might bid for CeramTec, an industrial ceramics unit of Rockwood Holdings, banking sources said.

U.S. specialty chemicals company Rockwood has hired Lazard to manage the sale of the Germany-based unit, which is expected to fetch around $1.7 billion

The deal would be one of a growing number of asset sales in Germany as improved euro zone sentiment and a build-up of liquidity following a dearth of mergers and acquisitions last year has increased the availability of bank financing and helped create the most attractive prices in years.

Rockwood has decided to sell CeramTec as it seeks to focus on lithium, for which demand is increasing due to the advent of lithium batteries in cars and the rising popularity of smartphones and tablets, which need longer-running batteries.

Information memorandums on CeramTec are expected to be sent out next week to prospective buyers, which could include private equity firms Advent, Bain Capital, CVC Capital Partners, EQT, Permira and Warburg Pincus.

Bankers are approaching the private equity firms to propose debt packages of around 816 million euros or six times CeramTec's approximate 136 million euros in EBITDA (earnings before interest, taxes, depreciation and amortisation), the sources said on Friday.

Debt is likely to be provided through a mixture of senior leveraged loans and junior debt such as mezzanine loans or high-yield bonds, they added.

Rockwood is also likely to approach trade buyers such as Kyocera and Morgan Crucible to see whether they are interested, the sources said.

Rockwood could not immediately be reached to comment.

CeramTec, which was founded in 1903, produces ceramics that go into thousands of products from filters for water treatment to electronic components in factory robots. It had sales of $548 million in the 12 months to September.

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