LONDON, July 11 Global alternative investment manager Oaktree Capital Management is seeking debt financing of up to 200 million euros ($272.81 million) to back a potential acquisition of French roofing materials maker Onduline, banking sources said on Friday.
Private equity firms Astorg Partners and Abenex -- formerly known as ABN Amro Capital France -- acquired Onduline in 2006 from family shareholders. It has grown in various jurisdictions including in the US with the acquisition of US roofing materials manufacturer Tallant Industries in 2010.
The buyout firms are now looking to sell the company and have entered into exclusive talks with Oaktree, banking sources said.
Oaktree has knowledge of the sector having been involved in German roofing materials business Monier, French clay building materials maker Terreal and Finnish mineral wool insulation provider Paroc, the banking sources said.
"Oaktree is very good in this sector so an acquisition of Onduline makes sense," one of the banking sources said.
There are some concerns however that Onduline's presence in emerging markets could make the debt more difficult to sell to investors which are generally unfamiliar with the region, the banking sources said.
"Onduline has a big presence in the emerging markets which investors will find hard to deal with," a second banking source said.
Oaktree, Astorg and Abenex were not immediately available to comment.
Up to 200 million euros of debt financing equates to around 3.5 times Onduline's earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately 50 million euros, the banking sources said.
Debt would be in the form of senior leveraged term loans and undrawn facilities denominated in euros and possibly dollars if available, given the company's exposure to emerging markets, the banking sources said.
Onduline, cellulose-bitumen based roofing and under-roofing material, was invented and launched on the French market in 1950. ($1 = 0.7331 Euros) (Editing by Christopher Mangham)