RLPC-Bankers prepare debt pitches for Diana and Deoleo sales

LONDON Thu Feb 6, 2014 12:00pm EST

LONDON Feb 6 (Reuters) - Bankers are preparing debt packages to finance the potential sales of French natural ingredients producer Diana Ingredients and Spanish food group Deoleo, banking sources said on Thursday.

The companies are expected to attract a lot of attention from private equity and trade buyers, eager to do deals following a dearth of acquisitions business in 2013.

Ardian, formerly Axa Private Equity, bought Diana in 2007 backed with 517.9 million euros, about $700 million, of leveraged loans, according to Thomson Reuters LPC data.

Last year JP Morgan and Lazard were hired to manage a sale of the company for about 1.2 billion euros, the sources said.

First round bids in an auction process are expected to be submitted at the end of February, they said.

Bankers familiar with Diana's business were given information at the end of January to enable them to put together packages to pitch for the business, the sources said.

The debt, likely to total about 700 million euros - 7 times core earnings of 100 million, could be in senior leveraged loans and subordinated debt, denominated in euros and dollars.

"All options are being considered for debt packages on Diana. It is proving to be a popular credit and a lot of banks are looking at it," one of the sources said.

Diana produces and sells natural ingredients used in the pet food, human food and beverages and pharmaceutical industries. It employs 1,640 people and operates in 23 countries, according to its website.

Bankers are also working on debt packages to back a potential sale of Deoleo, in a sales process also run by JP Morgan, the sources said.

The food group, which includes a number of olive oil brands including Bertolli and Carbonell, is quoted on the Spanish stock market and shareholders include Spanish banks.

First round bids are likely to be submitted in the coming weeks, the sources said.

Bankers are considering debt packages of around 560 million euros - or 6.25 times Deoleo's approximate 90 million core earnings, denominated in euros and dollars, the sources said. ($1 = 0.7353 euros) (Editing by Louise Ireland)

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