March 26, 2015 / 10:25 PM / 5 years ago

Platinum Equity nears deal for Itochu's PrimeSource -sources

March 26 (Reuters) - Private equity firm Platinum Equity LLC is in advanced talks to buy PrimeSource Building Products Inc, the largest distributor of screws and nails in the United States, from Itochu Corp, according to people familiar with the matter.

A deal will likely value PrimeSource at between $800 million and $900 million, the people said on Thursday. An agreement may be reached as early as next week, though it is still possible that the negotiations will fall apart, the people added.

The sources asked not to be identified because the negotiations are confidential. Platinum Equity declined to comment, while an Itochu spokesman did not respond to a request for comment.

Reuters reported in November that Itochu, a Japanese trading house, had hired investment bank JPMorgan Chase & Co in an effort to sell PrimeSource for more than $1 billion.

Based in Irving, Texas, PrimeSource distributes building materials for the residential, commercial and industrial construction markets. It has 42 distribution centers throughout the United States and Canada and more than 1,200 employees.

Itochu acquired PrimeSource in 1998. The Tokyo-based company also owns a Japanese building materials business called Itochu Kenzai Corp.

Last month, Itochu stuck to its annual net profit outlook of 300 billion yen ($2.56 billion) for the year that ends March 31, as solid non-resource operations offset poor resource segments.

For the April-December period, Itochu eked out a 2.5 percent gain in net profit to 231 billion yen, as non-resource segments such as machinery and life-style earned a record profit.

Founded in 1995, Los Angeles-based Platinum Equity is a buyout firm with more than $7 billion in assets under management. (Reporting by Greg Roumeliotis in New York; Editing by Phil Berlowitz)

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