FRANKFURT/LONDON Jan 13 French turbine and train
maker Alstom is set to receive tentative bids this
week for its heat exchanger business in a potential 600
million-euro ($820 million) deal, three people familiar with the
Private equity firms such as PAI, Rhone, Pamplona, Triton,
Bain and Advent are likely to hand in offers by a Jan. 15
deadline, the people said, adding that more than 50 investors
initially received information packages from Goldman Sachs,
which is organising the auction.
Alstom, which makes high-speed TGV trains, announced
sweeping job cuts in November and said it would sell up to 2
billion euros of assets to raise cash after a tough first half
of the year.
One of the assets put up for sale is the heat exchangers
business that comprises Air Preheaters unit, making products
used by boiler companies and utilities, as well as the Gas-Gas
Heater unit that makes devices salvaging heat from the flue gas
from power plants before it exits through the stack.
The units, with combined sales of some 500 million euros,
are based in the German cities of Mannheim and
Private equity groups are likely to offer to pay 520-650
million euros or about eight to 10 times their earnings before
interest, taxes, depreciation and amortisation of roughly 65
million euros, the sources said.
Bankers are working on debt financing packages to back a
sale of Alstrom, banking sources said.
Debt could total around 422.5 million euros, denominated in
euros or dollars, or 6.5 times Alstrom's EBITDA, one of the
Separately, several buyout groups are preparing to bid for a
heat exchanger unit that German-based GEA has put on
the block and is likely to fetch about 1.2-1.3 billion euros.
Bids for that unit are due on Jan. 27. Private equity
groups including Bain, Onex, First Reserve, Rhone, Permira,
Blackstone, Clayton Dubilier & Rice, Carlyle and Advent are
expected to hand in tentative offers.
"None of the buyout groups are looking to combine the two
heat exchanger units as they are quite different," one banker
familiar with the transaction said. He added that at the same
time, several private equity firms will look at both assets in
the beginning and then decide to just work on one.
Alstom, Goldman Sachs, GEA and the private equity groups
declined to comment. Onex, Rhone and Pamplona were not
immediately available for comment.
($1 = 0.7314 euros)
(Additional reporting By Claire Ruckin, editing by David Evans)