Exclusive: AAC Capital plans sale of kettle component maker Strix
HONG KONG / LONDON
HONG KONG / LONDON (Reuters) - AAC Capital UK is looking to sell kettle safety firm Strix in a deal that could value the company at $500 million and draw interest from other private equity firms and Chinese buyers, three sources familiar with the matter told Reuters.
AAC, the former UK private equity arm of ABN Amro, has hired Lazard to sell Strix Investments Ltd, which is headquartered in the Isle of Man but has offices in Belgium, Russia, China and Hong Kong.
Lazard is expected to kick off the auction at the end of the month, said two of the sources, who could not be named as they were not authorized to talk to media.
Strix declined to comment. Lazard and AAC Capital were not immediately available to comment.
The company says one in five people use its safety control devices, with over 1 billion usages a day. It has core annual earnings (EBITDA) of around $60 million and could fetch around eight times that amount, said two of the sources, who are looking to back prospective buyers.
Strix's systems prevent kettles and coffee makers boiling dry and protect heating elements, but it also has sales and design relationships with domestic appliance brands and retailers, including Tesco (TSCO.L), Kenwood and Morphy Richards, according to AAC Capital's website.
European technology companies are in strong demand in China, but Strix is also expected to attract attention from private equity buyers because of its potential to expand in the country.
The Strix sale would be the latest in a series of deals where suitors have had the opportunity to buy controlling stakes in businesses either based in China or with significant exposure to the world's second-biggest economy.
The future of many such businesses is now largely reliant on Chinese growth, and private equity firms and corporate buyers are seeking opportunities to leverage European technology and combine it with Chinese demand, according to bankers.
As much as 30 percent of the company's revenue comes from China, but the company is hoping to increase that to 40 percent over the next five years, one of the sources said.
Strix has been owned by ABN Amro's private equity arm since May 2005. Other assets have included restaurant chain TGI Friday's. The unit became AAC Capital Partners in 2011.
(editing by Pamela Barbaglia and Tom Pfeiffer)