DUBAI Private equity firm Clayton Dubilier & Rice (CD&R) has agreed a deal to buy Germany-based packaging group Mauser from Dubai International Capital (DIC) for around 1.25 billion euros ($1.72 billion), two sources familiar with the matter said on Sunday.
The deal is one of the largest asset disposals by a state-owned investment fund in the emirate since its debt crisis at the turn of the decade, which forced a number of these vehicles to reschedule debt worth billions of dollars.
Reuters reported on Thursday that CD&R was in advanced talks to acquire Mauser, which makes packaging equipment such as cans and drums for transporting medical waste and other hazardous chemicals.
DIC declined to comment, while no one at CD&R could be reached for comment outside of normal business hours.
The Dubai fund, part of Dubai Holding, the personal investment vehicle of the emirate's ruler, Sheikh Mohammed bin Rashid al-Maktoum, was advised by Bank of America-Merrill Lynch (BAC.N). CD&R was assisted by Credit Suisse CSGN.VX, according to the sources.
Mauser was put up for sale earlier this year, having been bought by DIC from JP Morgan's (JPM.N) buyout unit in 2007, in a deal which valued the firm at 850 million euros.
At one stage it seemed the Mauser sale would be part of an auction involving two other DIC assets - British engineering group Doncasters and German alumina manufacturer Almatis - but this is was scrapped and a sole process for Mauser was pursued.
CD&R edged out interest from a number of other parties, including a joint bid from buyout firm Ardian in combination with industry rival Technoplast and one from Pamplona.
The New York-headquartered fund is lining up a syndicated loan of around 1 billion euros to back the purchase, or 6.25 times Mauser's roughly 154 million euros in EBITDA (earnings before interest, taxes, depreciation and amortization).
The loan is likely to be covenant-light and a mix of dollars and euros, split between first and second lien leveraged loans, banking sources had said previously. ($1 = 0.7269 euros)
(Editing by David French and Greg Mahlich)