RLPC-Bidders line up for Parex sale - bankers

LONDON Fri Oct 11, 2013 11:34am EDT

LONDON Oct 11 (Reuters) - The sale of French construction company Materis' industrial mortars unit Parex has attracted a clutch of bidders with private equity and trade firms making it through to the second round of an auction process, banking sources said on Friday.

French private equity firm Wendel acquired Materis in 2006 in a leveraged buyout and has been seeking to sell some assets in a bid to reduce Materis' 1.9 billion euros ($2.6 billion) of debt and cut its overall exposure to construction.

It launched a sale process for Parex in August, hiring BNP Paribas and Rothschild as advisers on the auction, which is looking for a price of around 1 billion euros and is expected to complete in the first half of 2014.

Private equity firms Bain, BC Partners, CVC and Pamplona have made it through to the second round of the auction after first round bids were submitted on Oct. 7. Trade buyer Henkel has also made it through, banking sources said.

All of the potential buyers either declined to comment or were not immediately available to comment. Wendel declined to comment.

Second round bids are expected to take place next month, banking sources said.

DEBT

Bankers are preparing debt packages of between 4.5 times and 5.5 times Parex's approximate 99 million euros of earnings before interest, taxes, depreciation and amortisation (EBITDA).

Debt is likely to total around 450 million euros if senior leveraged loans are used or around 550 million euros if subordinated debt such as high-yield bonds or mezzanine loans are used alongside senior leveraged loans.

Materis' loans have risen on Europe's secondary loan market since the auction was announced and were quoted at 95.5 on Friday compared with 93.5 in mid-August, according to Thomson Reuters LPC data.

Last year, BNP Paribas and Rothschild were also handling the sale of Materis' aluminates supplier Kerneos but the process failed after bids fell short of a price tag around 680 million euros.

($1 = 0.7395 euros) (Editing by Mark Potter)

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