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LPC: Banks offer Excelitas bidders more than US$1bn in buyout debt
October 6, 2017 / 4:00 PM / 2 months ago

LPC: Banks offer Excelitas bidders more than US$1bn in buyout debt

NEW YORK, Oct 6 (Reuters) - Private equity firms preparing bids for US electronics and optical sensor component maker Excelitas Technologies Corp are being offered debt financing from banks between roughly US$1bn and US$1.1bn, two sources close to the matter said.

Investment bank Goldman Sachs, which is running the sale as part of a dual-track process that includes a possible initial public offering, is circulating a financing proposal to potential buyers on the high end of the range, at 6.5 times debt-to-Ebitda, or earnings before interest, taxes, depreciation and amortization, the sources said.

Goldman declined to comment.

This is the second attempt current owner Veritas Capital has made to unload Excelitas. The private equity firm tried to sell the company in 2014, but no deal was reached, Reuters reported at the time.

Other banks are extending packages closer to US$1bn in debt, or six times debt-to-Ebitda, the sources said, asking not to be identified because the matter is private and negotiations are ongoing.

Among the additional banks looking at financing the deal are Citigroup, RBC, Morgan Stanley, Credit Suisse and UBS, one of the sources said.

The banks declined to comment.

The debt is likely to be structured as a secured loan with a first priority claim and a secured loan with a second priority claim, according to the same source.

Excelitas is asking for final bids next week.

Remaining bidders include buyout shops AEA Investors and Cornell Capital, the sources said. AEA had partnered up with Bain Capital earlier in the process to potentially advance an offer, they said.

Cornell declined to comment. AEA and a representative for Bain did not respond to requests for comment.

Bankers advising bidders said they expect Excelitas to sell at around nine times the company’s roughly US$165m of marketed Ebitda for an enterprise value of about US$1.5bn.

The company may still opt for an initial public offering if a listing commands a higher valuation.

Reuters previously reported the deal could fetch as much as US$2bn, which would translate to an Ebitda multiple of around 12 times.

Excelitas makes products such as light-emitting diodes (LEDs) and flash lamps, which are used in applications ranging from medical lighting to aerospace and defense equipment.

Veritas formed Excelitas in 2010 through the roughly US$500m acquisition of scientific instruments maker PerkinElmer Inc’s illumination and detection solutions business.

The company went on to make acquisitions, including Kaiser Systems Inc, a manufacturer of high-voltage power systems, and Qioptiq, a maker of specialized optical components and lenses. (Reporting by Andrew Berlin; Editing By Michelle Sierra, Lynn Adler)

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