U.S. buyout firms eye stake in Australia's Pact - sources
HONG KONG |
HONG KONG (Reuters) - U.S. buyout firms Blackstone Group (BX.N), Carlyle Group (CG.O) and KKR & Co (KKR.N) are talking to banks on potential bids for about half of Australia's Pact, in a deal that could value the privately held packaging company at as much as $1.4 billion, sources said.
Pact has hired Deutsche Bank (DBKGn.DE) to advise on the sale of around 50 percent of the company as it seeks a partner to help it generate new growth outside Australia, the sources said. They spoke on condition of anonymity because the matter is confidential.
"The owner is not interested in exiting the business, but is asking for partners to bring growth to the table," one of the sources said.
That growth would be expected to come from overseas, the source added, which is why Pact is looking to form a partnership with international private equity firms.
The firm has set an end-June deadline for first-round bids.
A spokeswoman for Pact could not immediately comment, while KKR, Carlyle and Deutsche Bank declined to comment. Blackstone was not immediately available for comment.
WHAT IS PACT?
Pact is controlled by Raphael Geminder, son-in-law of the late billionaire Richard Pratt. Pratt's privately owned Visy Industries packaging empire helped him to become the country's fourth-richest person in 2008, the year before he died, with a fortune of A$5.5 billion.
Pact manufactures a range of plastic packaging products including food containers, bottles, trays and pails. It owns brands, including VIP Packaging, Plaspak and Salient Asia Pacific.
Pact has earnings before interest, tax, depreciation and amortisation (EBITDA) of around A$200 million, according to two banking sources. Around A$20 million of those earnings come from a joint venture the company has in Indonesia that does Southeast Asian business, and potential investors are analysing the venture to assess its potential to increase the company's growth.
Pact considered an initial public offering in 2010 that was valued at around A$1 billion, but decided against that option, according to media reports at the time.
Reuters first reported that Pact had hired Deutsche to investigate bringing in an investor in May.
Bain Capital was also approached but had decided not to proceed with a bid, according to a source familiar with the matter. ($1 = 1.0016 Australian dollars)
(Additional reporting by Victoria Thieberger in MELBOURNE and Narayanan Somasundaram in SYDNEY; Editing by Muralikumar Anantharaman)
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