FRANKFURT Oct 14 A number of buyout groups are
expected to hand in tentative offers for building materials
maker Xella by a Monday deadline in a potential 2 billion euro
($2.2 billion) deal, as its private equity owners try to benefit
from high company valuations, according to several people close
to the deal.
Bids by Bain, Apollo, Blackstone, Lone Star, Triton
and Cinven will likely value the company at 6 to 7 times Xella's
expected annual core earnings of 270 million euros, while the
sellers -- PAI Partners and Goldman Sachs' investment arm
-- are hoping for a multiple of 8 times, the sources said.
Listed sector peers such as Wienerberger, Braas
Monier or Etex trade at roughly 6 to
7 times their expected core earnings.
The private equity groups and Xella's owners declined to
Xella posted revenues of 1.3 billion euros and core earnings
of 259 million in the 12 months to the end of June 2016,
according to its latest financial presentation. Its net debt
stood at 705 million euros.
An attempt to float Xella on the stock exchange failed last
Xella has given no specific forecast for core earnings but
has said that it expects its efficiency programme to bear fruit
while it sees an upward trend in the construction industry
continuing in its core markets where Germany, the Netherlands
and Poland have been drivers over the last two to three years.
Building materials brands such as Ytong, Hebel and Silka
account for roughly two thirds of the Duisburg, Germany-based
group's business, while 20 percent of its sales come from
higher-margin lime and limestone businesses, which account for
almost a third of group earnings.
($1 = 0.8928 euros)
(Additional reporting by Alexander Hübner; Editing by Maria