July 19, 2011 / 8:20 PM / in 7 years

Auto parts maker Mark IV on auction block-sources

* Mark IV Automotive, known as Dayco, for sale-sources

* Company has $110 mln EBITDA, may be sold for 5-6 times

By Soyoung Kim

NEW YORK, July 19 (Reuters) - Mark IV Automotive, which makes power transmission components for cars and trucks, is seeking a buyer for the company and could fetch more than $600 million, people familiar with the matter said on Tuesday.

The Troy, Michigan-based business, also known as Dayco, has about $110 million in earnings before interest, tax, depreciation and amortization (EBITDA) and may be sold for about 5 to 6 times EBITDA, these people said. Lazard Ltd (LAZ.N) is advising Mark IV on the process, they said.

Dayco is the largest, and the only remaining division of its parent company Mark IV LLC, which recently sold its European air and engine cooling business to Italian auto parts maker Sogefi SpA (SGFI.MI) for an enterprise value of 150 million euros, or $215 million. [ID:nLDE75K0DA]

Mark IV, which was acquired by U.S.-based private equity firm Sun Capital Partners Inc in 2008 from London-based BC Partners Ltd, filed for bankruptcy protection in April 2009, hit hard by declining vehicles sales. It emerged from bankruptcy later that year.

All the sources asked not to be named because the process is not public. Representatives for Mark IV were not immediately available for comment and Lazard declined to comment.

Mark IV is among a number of formerly bankrupt auto industry assets that have gone on the auction block or tapped markets for an initial public offering this year as vehicle sales recover from pre-recession lows. (Reporting by Soyoung Kim; Editing by Tim Dobbyn)

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