VIENNA/FRANKFURT (Reuters) - JP Morgan’s (JPM.N) One Equity Partners (OEP) is seeking to sell its majority stake in Austrian packaging group Constantia Flexibles either through a stock market listing or a trade sale, three people familiar with the matter said.
Separate sources said in August that Constantia had hired banks for an initial public offering (IPO).
While a flotation in Frankfurt remains the preferred option for OEP, and could take place this year or early in 2014, the private equity firm is also keeping the door open for potential buyers, the three people familiar with the matter said on Tuesday.
“OEP has already tested the market and received tentative bids from private equity groups,” one of the people said, adding that CVC CVC.UL and EQT were among those who had put in bids.
OEP beat CVC in an auction to buy Constantia Flexibles in 2009. CVC has remained interested in the packaging business ever since, one of the three sources said.
OEP, Constantia Flexibles, CVC and EQT all declined to comment.
OEP owns 75 percent of Constantia Flexibles, with the founding family’s foundation holding the rest.
It is hoping to see Constantia Flexibles’ equity and debt valued at 1.8-2 billion euros in a transaction, equivalent to 8-9 times its 2013 expected earnings before interest, taxes, depreciation and amortization of 220-230 million, two of the sources said.
Private equity firms buy companies, try to boost their profitability by cutting costs or shaking up operations, and then sell them on in the hope of making a return.
While OEP could divest all of its stake in a trade sale, it is unlikely to be able to do so in a listing. Between 30 and 50 percent of the company would be floated on the stock market, sources have said in the past.
Constantia Flexibles’ net profit fell by a third to 21 million euros in the first half of 2013 and its operating margin slipped 0.6 percentage point to 7.7 percent.
The listed rivals trade at an average of 7.8 their expected earnings, according to Thomson Reuters data.
(The story has been filed again to correct the line that sources spoke on Tuesday, not Monday, as stated in paragraph 3.)
Reporting by Angelika Gruber and Arno Schuetze; Editing by Pravin Char