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By Arno Schuetze and Claire Ruckin
LONDON/FRANKFURT, March 31 (Reuters) - German private equity group Triton looks set to buy French turbine and train maker Alstom’s heat exchanger unit, sources familiar with the process said on Monday.
“Talks are very advanced,” one of the sources said.
The Triton bid is seen as having an edge over a rival offer by private equity firm Bain. Private equity firm Astorg was also expected to have submitted a bid last week, another source said.
Both sources said there were still hurdles to overcome before the deal was done.
Alstom had also attracted interest from CVC, Rhone and Onex in the unit that comprises Air Preheaters, which makes products used by boiler companies and utilities, and the Gas-Gas Heater unit that makes devices salvaging heat from the flue gas of power plants before it exits through the stack.
The offers value the unit at about 500-550 million euros ($690-$760 million), the sources said.
Bankers have prepared debt packages of about 430 million euros or roughly 6 times its core earnings of approximately 73 million, the sources said.
Debt is likely to be in the form of senior leveraged loans and second lien loans, they said.
Alstom, which makes high-speed TGV trains, announced sweeping job cuts in November and said it would sell up to 2 billion euros of assets to raise cash after a tough first half of the year.
Triton declined to comment while Alstom and Bain were not immediately available for comment. (Editing by Louise Ireland)