(Adds names of potential bidders)
By Claire Ruckin
LONDON May 17 Bankers are preparing around 800 million euros of debt financing to back a potential sale of German packaging group Constantia Labels by its owner private equity group Wendel, banking sources said.
Wendel hired Goldman Sachs to handle the sale of the group, which is part of a larger packaging firm Constantia Flexibles.
First round bids in an auction process are due on May 19, one of the sources said, adding that potential bidders included rivals Multi-Color Corporation and Advent-owned Fort Dearborn as well as private equity firms CVC, Cinven, Blackstone and PAI.
The 800 million euro ($891.92 million) debt financing equates to around 6.5 times Constantia Labels’ expected 113 million euro core profit for this year, including undrawn debt, the banking sources said.
Leveraged loans and high-yield bonds are both being considered, the sources said.
Wendel was not immediately available to comment.
Constantia Flexibles was bought by Wendel for 2.3 billion euros in 2014, after a planned initial public offering by former owner OEP had failed a year earlier.
Constantia Labels said in its annual report that it posted a 2016 core profit of 100.8 million euros last year on sales of 605 million.
According to its business plan, core profit could grow to 167 million euros by 2021. ($1 = 0.8969 euros) (Additional reporting by Arno Schuetze; Editing by Christopher Mangham and Jane Merriman)
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