May 11, 2012 / 3:40 PM / 7 years ago

Permira attracts bids for Iglo's multi-billion sale

LONDON (Reuters) - Private equity firm Permira PERM.UL has received tentative bids for the sale of its frozen food company Iglo, the maker of Birds Eye fish fingers, which is expected to fetch as much as 3 billion euros (2.41 billion pounds), banking sources said.

The sale process is being run by Credit Suisse and first round bids were received on Thursday from Bain Capital, BC Partners, Blackstone and PAI Partners while Clayton Dubilier & Rice was also thought to have submitted one, bankers said. The company has also attracted interest from trade buyers.

Iglo is likely to fetch 8 to 9 times its 325.8 million euro EBITDA (earnings before interest, taxation, depreciation and amortisation), the bankers added, making it the largest western European buyout since industrial group Tomkins’ 3.6 billion euro acquisition in July 2010 by a Canadian consortium, according to Thomson Reuters data.

Permira has looked to exit Iglo and concluded it would fetch more via a sale than a float.

Second round bids for Europe’s largest frozen food group are expected in June, banking sources added.

Permira declined to comment.

Permira bought Iglo from Unilever in 2006 for 1.73 billion euros, backed by around 1.5 billion of leveraged loans, and later bought the remaining part of Unilever’s European frozen food business, Findus Italy, in 2010 for 805 million euros, backed by 500 million of leveraged loans, according to Thomson Reuters LPC data.

Debt has since been reduced to 1.4 billion euros as of the end of 2011, the company said.

Credit Suisse has provided a staple financing package through a mixture of leveraged loans and high yield bonds to back any buyout, should it go to a private equity buyer.

Other banks are also preparing debt packages of around 2.4 billion euros including around 400 million euros of undrawn debt. Some banks are working in conjunction with other debt providers and the financing could include around 550 million euros of subordinated debt in the form of mezzanine loans or high yield bonds, bankers added.

The debt financing is expected to be between 6.25 to 6.5 times leveraged and include a mixture of sterling and euros but the company could also seek U.S. liquidity if it is too tough to raise the full amount in Europe’s volatile credit markets, bankers said.

Reporting by Claire Ruckin

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