* Higher-than-expected deal price of 730 mln euros
* Alstom aiming to raise up to 2 bln euros from sales
* Shares up 7 pct, biggest rise by a European blue-chip
(Adds analyst comment, financing details, shares)
By Maya Nikolaeva and Natalie Huet
PARIS, April 1 French turbine and train maker
Alstom is selling its heat exchanger business for a
higher-than-expected 730 million euros ($1 billion), giving a
boost to its drive to raise cash to help it cope with weak
demand for power equipment.
Shares in the company rose as much as 7 percent on Tuesday,
the biggest increase by a European blue-chip stock,
after it announced the sale to private equity group Triton.
Alstom has been hit hard by a drop in orders for power
equipment from utilities, which are suffering in turn from weak
The group said in November it planned to raise up to 2
billion euros from selling non-core assets to help pay its debts
and give it the flexibility to make acquisitions in
faster-growing markets, which could include rail signalling.
"The achieved price ... is at the top end of our
expectations and it illustrates that Alstom is moving forward
with its non-strategic asset disposals," said Rob Virdee, an
analyst at Espirito Santo.
Reuters reported advanced talks on the deal on Monday, with
sources citing an offer valuing the unit at about 500-550
Alstom said the deal was approved by its board of directors
on March 31 and would close in the first half of its 2014-2015
Triton's bid was seen as having the edge on a rival offer by
private equity firm Bain, sources familiar with the process had
said. Private equity firm Astorg was also expected to have
submitted a bid last week.
A group of banks including Barclays, Citi, ING, RBC and
Societe Generale are expected to have committed debt financing
to back the buyout, banking sources said.
The financing will total around 430 million euros or about
six times the heat exchanger unit's approximate 73 million euros
of earnings before interest, tax, depreciation and amortisation.
It will be in the form of senior and second lien leveraged
loans denominated in euros and dollars, the bankers said, adding
it will launch for syndication to institutional investors
shortly. Triton declined to comment on the financing.
The heat exchanger unit makes equipment and conducts
after-sales service for product lines used by boiler companies
and utilities such as air preheaters, gas-gas heater units for
thermal stations and heat transfer solutions.
It employs 1,500 people worldwide with operations in
Germany, the United States, Japan, China, India, Brazil,
Switzerland, Czech Republic, and is headquartered in Germany.
It is expected to post revenues of 430 million euros in the
year ending March 31, with a double-digit operating margin,
At 0955 GMT, Alstom shares were up 6.9 percent at 21.185
($1 = 0.7256 euros)
(Additional reporting by Claire Ruckin; Editing by Andrew
Callus and Mark Potter)