LONDON, Jan 9 (Reuters) - Bankers are lining up just over 1 billion pounds ($1.51 billion) of debt financing to back private equity firm KKR’s potential bid for the UK assets of cement makers Lafarge and Holcim, banking sources said on Friday.
The UK assets are for sale alongside a number of other assets worth about 12 percent of France’s Lafarge and Swiss peer Holcim’s combined revenues, in order for a planned merger between them to go ahead creating the world’s top cement group with $44 billion in annual sales.
Binding bids are due January 12, the banking sources said.
Debt packages of just over 1 billion pounds for the UK assets equates to around 5.5 times Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of approximately 170 million pounds, including undrawn debt.
Holcim’s French activities, Lafarge’s German interests and other operations in Austria, Hungary, Romania, Serbia, Britain, Canada, the Philippines, Mauritius and Brazil are up for sale in a deal which could fetch 6 billion euros ($7.08 billion) in total.
The sale of the assets has attracted interested from a number of bidders including Irish cement maker CRH ; Blackstone, Cinven and Canadian pension fund CPP; and a team consisting of CVC and sovereign wealth funds the Abu Dhabi Investment Authority (ADIA) and Singapore’s GIC. Meanwhile, Italy’s Italcementi and Turkey’s Sabanci are expected to bid for some assets.
India’s Aditya Birla Group is expected to bid for continental European assets, two of the sources said.
Bankers are working on debt packages of up to 4.5 billion euros to back private equity bids for all the assets, equating to around 5.5 times EBITDA of approximately 725-730 million euros, including undrawn debt.
Lafarge, Holcim and KKR declined to comment. Aditya Birla Group was not immediately available to comment. ($1 = 0.6606 pounds) ($1 = 0.8469 euros) (Additional reporting by Matthieu Protard and Gilles Guillaume in Paris; Editing by Christopher Mangham)