KKR Said to Seek Sale of 50% Stake in France’s Tarkett
KKR & Co. (KKR:US) is preparing to sell its 50 percent stake in Tarkett SA in a deal that may value the French floormaker at as much as $3.8 billion, five people familiar with the matter said.
KKR, the private-equity firm run by Henry Kravis and George Roberts, is working with JPMorgan Chase & Co. on the sale, said the people, who asked not to be identified because the process is private. The Deconinck family, which owns the rest of Tarkett, isn’t planning to sell its stake, the people said. KKR may also consider an initial public offering for its stake, two of the people said.
Based on valuations of rivals, the deal may value Tarkett at between $2.5 billion and $3.8 billion, according to one of the people. Initial information was sent out to potential strategic and financial buyers this month, the person said. KKR and JPMorgan declined to comment. Tarkett couldn’t immediately be reached for comment.
Tarkett, which designs, manufactures and sells PVC, wood, laminate, sports and other specialty flooring products, boosted sales by 11 percent to 2.3 billion euros ($3 billion) last year, helped by acquisitions and demand in Eastern Europe, Asia and North America. The company, based in the Paris suburb of Nanterre, has been jointly owned by KKR and the Deconinck family since 2007.
KKR agreed last week to buy industrial equipment maker Gardner Denver Inc. (GDI:US) for about $3.7 billion after raising its initial offer. The buyout firm, founded in 1976, oversaw $75.5 billion of assets as of Dec. 31. The firm’s industrials team closed a $1.1 billion deal last year for Capital Safety Ltd., the maker of harnesses and lanyards that protect workers from falls.
Tarkett’s 2012 earnings before interest, taxes, depreciation and amortization excluding one-time items rose 36 percent to 260 million euros. Last year’s acquisition of Tandus, a specialist in commercial carpet flooring in North America, could boost Tarkett’s Ebitda to 295 million euros, one of the people said.
Mohawk Industries Inc. (MHK:US) and Interface Inc., (TILE:US) two makers of flooring and carpet for residential and commercial applications, both trade at 9.9 times estimated 2013 Ebitda, while rival Forbo Holding AG (FORN) trades at 6.6 times estimated 2013 Ebitda, according to Bloomberg data.
With an Ebitda of 295 million euros and based on the average multiple of 7.2 times Ebitda paid in similar deals in North America and western Europe in the last five years, Tarkett would be valued at about about $2.8 billion, according to data compiled by Bloomberg.
Tarkett Chief Executive Officer Michel Giannuzzi said last month that the company’s low level of debt will enable him to continue the company’s policy of targeted acquisitions. Tarkett’s net debt rose to 452 million euros at the end of 2012 from 332 million euros a year earlier.
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