September 30, 2010 / 12:39 PM / 7 years ago

CVC seeks $1.5 billion for can-maker Mivisa: sources

LONDON (Reuters) - Buyout firm CVC CVC.UL is poised to receive preliminary bids for Mivisa MIVIS.UL, the Spanish food-can maker which it hopes will fetch 1 to 1.2 billion euros ($1.4 to $1.6 billion), people familiar with the matter said.

The potential sale underscores an improving market for the sale of industrial companies exposed to swings in the economy. First-round bids are due on Friday, the people said, and are likely to come from both rival private equity firms and competing packaging companies.

With Mivisa touted as a candidate for an initial public offering (IPO) earlier this year, it also highlights a trend of private equity firms opting to sell portfolio companies rather than brave rocky public markets.

Private equity suitors could include major U.S. firms such as Blackstone Group LP (BX.N), the Carlyle Group CYL.UL and Apollo Management LP APOLO.UL, some of the people said. Apollo earlier this year lost out in a bidding war for Pactiv Corp PTV.N, the U.S. maker of Hefty trash bags.

Blackstone, Carlyle and CVC declined to comment. Apollo and Mivisa could not immediately be reached for comment by Reuters.

Mivisa’s listed peers include Silgan Holdings Inc (SLGN.O), based in Woodland Hills, California, which says it is the largest metal food-can supplier in North America.

HIGH-YIELD BONDS

Based in Murcia in south-eastern Spain, Mivisa does not disclose financial information. However, one of the people familiar with the matter said it had an earnings before interest, tax, depreciation and amortization (EBITDA) margin of more than 20 percent.

Current EBITDA is about 125 to 130 million euros, this person said -- meaning CVC is seeking somewhere between 7.7 and 9.6 times this earnings number. Last year’s sales totaled $691.45 million, according to Thomson Reuters data.

News of the potential deal comes days after Doughty Hanson & Co DOUHA.UL agreed to sell metal-packaging firm Impress, which it had owned since 1997, to privately owned Irish glassmaker Ardagh Glass ARDG.UL.

    Ardagh, whose biggest shareholder is chairman Paul Coulson, has immediately moved to refinance the 1.7 billion euro deal with high-yield bonds in dollars and euros.

    Mivisa, founded by Spain’s Vivancos family in 1972, has already spent nearly a decade in private equity hands.

    It was acquired by Impala Capital Partners in 2001, who later brought in PAI Partners. The duo then sold Mivisa to CVC in 2005 in a deal that placed an enterprise value of 527 million euros on the company, according to Thomson Reuters data.

    In 2007 Mivisa took out new loans totaling 662 million euros, Thomson Reuters Loan Pricing Corp (LPC) data show, to fund a dividend payment to CVC and further growth.

    In May Dow Jones reported CVC had put Mivisa up for sale but said it had not abandoned listing plans.

    (Additional reporting by Alasdair Reilly with Andres Gonzalez and Judy MacInnes in Madrid; Editing by David Cowell)

    $1=.7362 Euro

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