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LONDON Aug 7 The bidding for the buyout of measuring and materials handling equipment maker Schenck Process is narrowing after Pamplona Capital Management dropped out, leaving two buyout firms to go head to head in the auction, banking sources said on Tuesday.
IK Investment put Schenck up for sale earlier this year and is expected to get around 700-800 million euros ($869-$993 million). Four bidders were originally chosen to submit second-round offers for the company including Pamplona, the bankers said.
Bain Capital and Rhone Capital submitted bids on Monday and are likely to go through to the final round of bidding in September, bankers added. There has also been trade interest from one Asian company. Morgan Stanley is running the sale process.
Bain, Pamplona and Rhone declined to comment. IK Investment was not immediately available to comment.
The bids received on Monday were unfinanced but bankers have been working on debt packages to back the deal should it go to a private equity buyer. Debt packages are likely to be around 400-440 million euros or around 5-5.5 times the company's approximate 80 million euros of earnings before interest, tax, depreciation and amortisation (EBITDA).
Schenck was acquired by IK from private equity investor HgCapital in 2007 for around 450 million euros. Since then IK has expanded the business with three acquisitions and the company now has over 3,000 employees worldwide and generates annual sales of more than 560 million euros. ($1 = 0.8056 euros) (Reporting by Isabell Witt and Claire Ruckin; Editing by Greg Mahlich)