| FRANKFURT, July 11
FRANKFURT, July 11 Germany's Siemens
has received tentative offers for the postal automation and
baggage-handling division being sold in its effort to streamline
operations and shed non-core assets, two sources familiar with
the transaction said.
The postal operation, which counts the U.S. Postal Service
and Deutsche Post among its customers, has benefited
from the growing number of consumers shifting to internet
The baggage-handling side of the business makes both
software to track luggage and mechanical equipment such as
conveyor belts. It has installed more than 300 baggage-handling
systems at airports all over the world.
German private equity firm Triton and U.S. investment groups
Gores and Platinum are among those that have handed in bids for
the 300 million euro ($386 million) division by the July
deadline, the sources said on condition of anonymity.
Siemens, Triton and Citigroup, which is running the
auction, declined to comment. Neither Gores nor Platinum were
immediately available for comment.
The postal automation and baggage-handling business has
annual revenues of about 800 million euros and earnings before
interest, tax, depreciation and amortisation of about 60 million
"Interest in the asset has been very robust, although it is
not an easy asset," one of the sources said.
One issue for prospective buyers is to line up banks that
can fund the debt guarantees that suppliers of the industry's
large machinery generally have to provide. These are to cover
pre-installation performance guarantees and warranties once the
machines have started operating.
The strong credit rating enjoyed by Siemens has meant that
the engineering group has provided these at very low cost, said
another source familiar with the deal.
A potential buyer would probably have to write a large
equity cheque for the postal automation and baggage-handling
division - without using large amounts of debt to finance the
acquisition - to convince banks to supply the guarantees.
"The transaction could end up in something like a 100
million euros all-equity deal," the source said, adding that the
enterprise value of the business is estimated to be about 300
The Siemens unit competes with U.S. group Pitney Bowes
, Northrop Grumman's French subsidiary Solystic,
Japan's NEC, Dutch group Vanderlande and Germany's