Bloomberg News

Wendel Said to Gauge Potential Interest in Materis Businesses

April 27, 2012

Wendel, France’s largest publicly traded investment firm, has begun gauging potential interest in Materis SA’s aluminates and admixtures units, valued at a potential 1 billion euros ($1.3 billion) combined, four people with knowledge of the plan said.

Kerneos, which makes cement aluminates, may fetch as much as 700 million euros and attract private equity buyers because of its steady cash flow, said the people, who declined to be identified because the plans are private. Cement admixtures maker Chryso may be valued at about 300 million euros and will likely attract industrial buyers, they said.

Materis, a French building-materials maker, is planning to sell one out its four divisions as it negotiates an extension of debt maturities. Wendel, which is based in Paris, bought the company for about 2 billion euros in 2006, with lenders led by agent BNP Paribas SA providing about 1.97 billion euros of loans, according to data compiled by Bloomberg. Materis’ other two divisions make mortars and paints.

Numerous buyers have expressed “strong interest” in each division, Wendel Chief Executive Officer Frederic Lemoine said at a conference in Paris last month. One of the divisions will be sold if an acceptable offer is made, he said.

Competitors in admixtures include Sika SA of Switzerland, while aluminates may interest Imerys SA (NK) and Cie. de Saint-Gobain SA, said Arnaud Palliez, an analyst at Raymond James in Paris.

“In both cases, I would rather expect interest from private equity firms,” said Palliez.

As part of the debt extension talks, Wendel and Materis’s managers are planning to inject 25 million euros of cash to fund the company’s capital expenditures, and provide as much as 50 million euros in a short term facility within the next year, according to a person with direct knowledge of the negotiations. Wendel and Materis’s managers had to inject 45 million euros of cash in 2009 as part of a first debt restructuring.

A spokeswoman for Wendel declined to comment.

To contact the reporters on this story: Anne-Sylvaine Chassany in London at achassany@bloomberg.net; Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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