February 19, 2014 / 2:21 PM / in 4 years

UPDATE 1-Paroc owners to launch $900 mln sale of insulation firm-sources

(Adds earnings details, peers, background on European construction market)

STOCKHOLM, Feb 19 (Reuters) - The owners of Finland’s Paroc are expected to launch a sale of the insulation material maker which could fetch more than 650 million euros ($894 million), three sources familiar with the matter said.

The owners, a consortium of banks and institutional investors, have hired Lazard to advise on the sale that may be completed before summer and is seen attracting interest from private equity firms, the people said.

The sources declined to be identified because the plans are private. Lazard declined to comment, whereas Paroc did not return a request for comment.

A potential sale of Paroc comes as the European construction market is expected to recover from several lean years following the global financial crisis.

Paroc’s closest listed peer, Danish stone wool maker Rockwool which reports this week, is seen posting an 8 percent rise in earnings before interest, tax, depreciation and amortization (EBITDA) for the fourth quarter of 2013, followed by a 15 percent rise for the full year 2014, according to a Reuters poll of analysts.

Lazard also advised on a 2006 sale of Paroc and on its debt restructuring in 2009. The firm was taken over by its lenders from Bahrain-based investment firm Arcapita in 2009 during the downturn when global construction slumped and Paroc’s sales dropped by almost 30 percent.

One of the sources said Paroc made EBITDA earnings of around 80 million euros in 2013 and was targeting a profit of around 90 million this year.

A price tag of 650 million euros including debt would mean a multiple of just above 7 times this year’s forecast EBITDA.

Listed Nordic firms whose fortunes also depend on the construction market, such as Rockwool, bath and toilet maker Sanitec, plumbing and heating company Uponor and kitchen firm Nobia have enterprise values at around 8 to 9 times forecast EBITDA.

Paroc makes stone wool, used to insulate buildings, and had sales of 430 million euros in 2012 and employed around 2,000, according to the company’s website. Paroc has not yet published figures for 2013. It has production facilities in Finland, Sweden, Lithuania, Poland and Russia. ($1 = 0.7272 euros) (Reporting by Sven Nordenstam; Editing by Alistair Scrutton and Louise Heavens)

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