SVP targets other private equity firms for Kloeckner Pentaplast sale - sources

FRANKFURT/LONDON Wed Aug 14, 2013 11:17am EDT

FRANKFURT/LONDON Aug 14 (Reuters) - Strategic Value Partners (SVP) is targeting other private equity firms as potential buyers of its German plastic films maker Kloeckner Pentaplast, three sources familiar with the deal said.

SVP bought Kloeckner Pentaplast, whose films are used to package foods and medicines, from Blackstone last year. Blackstone had bought the company from Cinven in 2007, backed by 1.25 billion euros ($1.65 billion) of leveraged loans.

Goldman Sachs and Jefferies, advisers to SVP and the co-owners, will start sending out information packs on Kloeckner Pentaplast in September, the sources said. The company has been struggled with rising raw materials costs as well as high leverage at about 10 times core earnings.

The two banks are expected to also offer financing options for the deal, one of the sources said.

Tentative bids, which are seen valuing the company at about 1 billion euros ($1.3 billion), are likely to come in by late October, a second source said.

Kloeckner Pentaplast will be offered to firms such as One Equity Partners, Carlyle, Bain and Advent but it remains unclear if these investors will actually hand in bids, the sources said.

The company could also make a strategic fit for industry peers such as India's Bilcare, Switzerland's Perlen or South Africa's Mondi, they said.

SVP and junior lenders acquired Kloeckner Pentaplast in 2012 following a lengthy restructuring process for 190 million euros in equity as well as 650 million euros in loans from Jefferies.

Kloeckner Pentaplast has annual sales of about 1.5 billion euros and more than 3,000 staff. In the twelve months to March 2013 it posted adjusted earnings before interest, taxes, depreciation and amortisation of 167 million euros.

Kloeckner Pentaplast, founded in 1965 as a unit of steel and machinery group Kloeckner-Werke, also makes pipe insulation and products to refine stationery products.

SVP, Kloeckner Pentaplast, the private equity investors and Perlen declined to comment, while Bilcare and Mondi were not immediately available for comment.

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