(Refiles to fix dateline)
* Deutsche Bank, Goldman Sachs to organise sale
* Initial bids expected in first quarter
By Arno Schuetze and Alexander Hübner
FRANKFURT, Dec 5 Private equity groups
Charterhouse and CVC have hired Deutsche
Bank and Goldman Sachs to sell energy-metering
firm Ista, two people close to the transaction said.
The sale is set to become one of the biggest private equity
transactions in Germany next year with a price tag of up to
about 3 billion euros ($3.9 billion), they told Reuters.
Information packages will go out early next year and
tentative bids were expected in the first quarter, the sources
said on Wednesday.
While 2012 has been a slow year for private equity sales,
leading to a backlog of deals, a flurry is expected early next
year as owners also prepare the sale of forklift-truck maker
Kion, publisher Springer Science and ferry group Scandlines.
Potential Ista bidders such as private equity investors
Bain, Blackstone, Hellman & Friedman and KKR are
starting work on the topic, sources close to the investors said,
adding that bidders were unlikely to match the asking price.
"Super asset - super expensive", the head of one big private
equity group said, adding Ista's management team was doing an
excellent job and growth perspectives looked strong given new
energy market rules.
Charterhouse bought Ista at the height of the buy-out boom
in 2007 for 2.4 billion euros from CVC, backed with 2.1 billion
debt. CVC later bought back 24 percent.
Ista's current debt of 1.8 billion euros is 6.2 times its
expected 290 million euros earnings before interest, taxes,
depreciation and amortization (EBITDA) for 2012.
Although Ista chief executive Walter Schmidt said in a
recent interview his firm was "fit for an IPO", an initial
public offering is not the owners' preferred option, sources
close to them said.
"In my eyes, Ista is over-leveraged for an IPO," an equity
capital markets banker said, adding refinancing risks were
regarded as high from any debt multiple above 3 times EBITDA.
To back any buyout by an investor, lenders are working on
debt packages of around 2 billion euros, bankers have said.
Ista as well as peers such as Macquarie-owned Techem
were expected to get a boost from a European Union
directive requiring companies charge customers only for energy
they actually consume. That is so far the case only in a few
European countries such as Britain, Denmark and Germany.
"The Energy Efficiency Directive will, for sure, give our
business a push," a spokesman for Ista said, declining to be
more specific or to comment on the sales process.
The banks and potential bidders also declined to comment.
Ista, which has energy meters installed 11 million flats and
commercial sites, last year posted sales of 700 million euros
and employed 4,600 staff in 25 countries.
($1 = 0.7733 euro)
(Additional reporting by Claire Ruckin and Isabell Witt;
Editing by Dan Lalor)