October 12, 2017 / 3:04 PM / 9 months ago

Germany's Koerber prepares sale or float of machine tools business -sources

FRANKFURT, Oct 12 (Reuters) - Germany’s industrial holding Koerber AG is considering a sale or stock market listing of its machine tools business worth roughly 700 million euros ($829 million), people close to the matter said.

Koerber, which supplies technology to companies in the automation, logistics, pharma, tissue and tobacco industries, has asked investment bank Macquarie to analyse strategic options for United Grinding Group (UGG), they said.

UGG makes tools to grind surfaces and small workpieces and is expected to report earnings before interest, tax, depreciation and amortisation (EBITDA) of about 70 million euros this year.

Potential buyers — sector rivals as well as private equity groups — may value the company at 9-11 times EBITDA, one of the sources said.

Koerber said in a statement that it aimed to ensure a favourable position for all its businesses. “That includes keeping all options for further developments in mind,” a group spokeswoman said.

Macquarie declined to comment.

Koerber AG posted 171 million euros of earnings before interest, tax and amortisation (EBITA) on sales of 2.2 billion euros last year and employs 11,250 staff. It is owned by the Koerber Foundation, set up by founder Kurt Koerber, who started his business in 1946 repairing cigarette machinery.

Koerber later diversified into the paper and tissue sector and in 1978 set up a machine tool division after the takeover of the grinding machine manufacturer Blohm. Acquisitions and divestitures of other individual business lines followed.

The foundation receives annual dividends from Koerber AG and promotes projects in the area of demographic shifts, digitalisation and international cooperation.

$1 = 0.8442 euros Reporting by Andres Gonzalez and Arno Schuetze. Editing by Jane Merriman

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