January 31, 2018 / 5:26 PM / in 7 months

Sun Capital launches sale of packaging group Coveris Rigid -sources

FRANKFURT/LONDON (Reuters) - Buyout group Sun Capital is launching the sale of its European packaging group Coveris Rigid, in a potential 640-720 million euro deal, as it moves ahead with the split of the company into four units, people close to the matter said.

Information packages for the Rigid unit, which makes plastic packaging for the food, beverage, healthcare and agriculture sectors, will be sent to prospective buyers this week and first-round bids are due by the end of February, the sources said.

Sun Capital declined to comment.

Rigid, with about 80 million euros in 2018 expected earnings before interest, tax, depreciation and amortisation could be valued at about eight times that, in line with peers such as Britain’s RPC (RPC.L), two sources said, while another said it could even fetch more than 9 times that.

Rothschild has been retained as an advisor for the Rigid sale, Coveris had said in a statement in November, when it announced the split into the four units: Rigid, Americas, EMEA, and UK Food & Consumer.

Bankers are working on buyout financing of about 520 million euros in senior and junior debt, one of the sources said.

The company is expected to attract a number of private equity as well as some strategic bidders, the sources said.

In a separate auction, Sun Capital has put its Americas unit up for sale with the help of Goldman Sachs and Wells Fargo, in deal that may see that unit valued at about $1 billion.

Earlier this year, Sun Capital said it had entered into exclusive talks to sell its cosmetics packaging group Albea to private equity group PAI.

The Albea acquisition, in which PAI had initially partnered with Bain but then opted to go it alone, valued the French company at about $1.5 billion, people close to the matter have said in the past.

Reporting by Arno Schuetze and Claire Ruckin, editing by David Evans

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