| NEW YORK, July 26
NEW YORK, July 26 TPG Capital LP, Warburg Pincus
LLC, Ares Management LLC and Berkshire Partners LLC are
competing for building products maker CPG International Inc,
whose sale could fetch as much as $1.5 billion, according to
four people familiar with the matter.
The private equity firms are through to the second round of
bidding and are preparing to submit offers by the middle of
August, the people said this week, asking not to be named
because the matter is not public.
CPG is itself owned by a private equity firm, AEA Investors
LP. It has hired Barclays and Deutsche Bank
to find a buyer for the company, which makes building supplies
for residential and commercial markets such as outdoor decking
and porch boards, Reuters reported in May.
CPG International, Warburg Pincus, TPG, Berkshire Partners
and Ares declined to comment. AEA did not respond to a request
Headquartered in Scranton, Pennsylvania, CPG International
makes synthetic construction and building products to replace
wood, metal and other materials, according to its website.
CPG filed for an initial public offering in 2011 but never
went ahead with it. An outright sale to another private equity
firm may now look more appealing to AEA given the recent
concerns of stock market investors over the state of the home
Fears that the residential construction sector may be
overheating led to home builder WCI Communities Inc selling
fewer shares than planned and pricing its $102 million IPO at
the bottom of its guided range this week.
Shares of home builder Taylor Morrison Home Corp,
which TPG and Oaktree Capital Group LLC took public in
April, traded as low as its IPO price for the first time on
Thursday, ending trading down 7 percent on such fears.
AEA acquired CPG International in 2005 from private equity
firms Whitney & Co and Clearview Capital LLC for $380 million,
according to a 2006 bond sale regulatory filing. AEA put in $149
million as equity for the deal, the filing shows.
Last year, CPG bought TimberTech, a U.S. manufacturer of
low-maintenance decking, railing and fencing, for $320 million
from the Crane Group.
Standard & Poor's Ratings Services Inc projected at the time
the deal would boost CPG's revenues by more than one third to
about $530 million in 2013, with earnings before interest, tax,
depreciation and amortization at about $100 million.
Were Berkshire Partners to prevail in the auction, it would
be the second company in the housing sector it would buy from
AEA this year. In February it acquired a majority interest in
SRS Distribution Inc, the fourth largest residential roofing
distributor in the United States, from AEA for an undisclosed