Sale of Materis subsidiary Parex stalls-Reuters

(Reuters) – The planned sale of Parex, the industrial mortars business of construction company Materis, has stalled after bids failed to meet price expectations of about 1 billion euros ($1.37 billion), banking sources said on Monday.

Parex attracted a clutch of bidders after Materis’s private equity owner Wendel launched the sale process through BNP Paribas and Rothschild in August, but by November it had become a two-horse race between CVC and Pamplona.

An announcement on the successful bidder had been expected by now but the process has stalled because the highest bids were about 800 million euros, the sources said.

CVC and Pamplona declined to comment and a Wendel spokesman was not immediately available to comment.

Materis had similar problems when it first tried to sell calcium aluminates maker Kerneos in 2012 and the process stalled after bids fell short of an approximate 680 million euro price tag, according to Thomson Reuters LPC data.

Materis is now in exclusive talks to sell the unit to Astorg Partners for 610 million euros.

Bankers had been preparing debt packages to back a Parex buyout for up to 550 million euros, or 4.5 to 5.5 times the business’s approximate earnings before interest, tax, depreciation and amortisation (EBITDA) of 99 million euros.

French private equity firm Wendel acquired Materis through a leveraged buyout in 2006 and has been seeking to sell some assets in a bid to reduce the company’s 1.9 billion euros of debt and cut its overall exposure to the construction sector.

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