(Reuters) – New Zealand’s packaging firm Reynolds has selected several private equity groups but no peers to participate in the second round of bidding for its Swiss subsidiary SIG Combibloc, several people familiar with the deal told Reuters.
Reynolds, backed by New Zealand’s richest man, Graeme Hart, is exploring a sale of the world’s second-largest maker of drink cartons as it tries to trim debt it has accumulated through leveraged buyouts. It has mandated Goldman Sachs to organise the sale.
A consortium comprising CVC and Onex, as well as buyout groups BC Partners, Bain and Partners Group are among those invited to management presentations after handing in bids above the ‘cut-off price’ of just under 4 billion euros ($5.2 billion), the sources said. Final bids are due next month.
China’s Greatview, one of the few strategic groups which had looked at the asset, is no longer taking part in the auction, one of the sources added.
SIG, which Hart acquired for $2.3 billion in 2007, has annual earnings before interest, tax, depreciation and amortisation (EBITDA) of around $500 million and had been expected to fetch about 10 times that amount in a potential deal.
Representatives for Reynolds, SIG and Greatview did not immediately respond to requests for comment, while CVC, Onex, BC Partners, Bain and Partners Group declined to comment.
A sale of Switzerland-based SIG is part of Hart’s efforts to reduce the $18 billion debt pile his packaging empire built up in an acquisition spree. Those deals included the $6 billion acquisition of Pactiv, the maker of Hefty trash bags, in 2010, and the $4.5 billion takeover of plastic container producer Graham Packaging in 2011.
SIG manufactures aseptic carton packaging that allows juices, milk, soups and sauces to be stored for a long period of time without refrigeration. The company has around 5,100 employees in 40 countries.
SIG ranks second in global food and drink carton packaging sales, behind Sweden’s Tetra Laval.Get your FREE trial or subscribe now to Buyouts to find new deal opportunities, super-charge your fundraising efforts and track top managers.