Advent, Doughty Hanson in Race for Belgium’s Magotteaux

Buyout shops including Advent International and Doughty Hanson & Co. are competing to buy Belgium’s Magotteaux, a provider of grinding equipment to miners and cement makers, Reuters reported. The company could fetch as much as 600 million euros ($860 million), Reuters said. The seller is majority owner IK Investment Partners.

(RLPC/Reuters) – Private equity firms are competing with large corporate buyers to snap up Belgium’s Magotteaux, a leading supplier of grinding equipment to miners and cement makers, people familiar with the process said.

Advent International and Doughty Hanson & Co are in the second round of the auction process, the people said.

Australian groups OneSteel , a steelmaker whose interests include industrial grinding machinery, and Orica , which specialises in mining explosives, are also in the second round, one of the people said.

Magotteaux could fetch around 600 million euros ($860 million) for seller IK Investment Partners, or between 9 and 10 times its 62 million euro earnings before interest, tax, depreciation and amortisation (EBITDA), banking sources said.

Private equity group IK Investment Partners bought a majority stake in the business in 2007 for an undisclosed sum, a deal brokered by Magotteaux’s then CEO Jean-Jacques Verdickt, a former director of Fortis Bank.

Bids are due on Aug. 10, some of the people said.

Headquartered in Liege, Magotteaux makes crushers and grinding parts for use in the mining, quarrying and cement making industries.

The company employs 2,400 people at 13 production sites and 27 sales offices around the world. According to its website, the company has an annual turnover of about 500 million euros.

Magotteaux has a loan of around 210 million euros, arranged in 2010 by BNP Paribas Fortis, ING Belgium and KBC Bank, according to Thomson Reuters LPC data.

Advent, Doughty Hanson and IK Investment Partners declined to comment. OneSteel and Orica did not immediately respond to requests for comment. ($1 = 0.700 Euros) (Reporting by Isabell Witt and Simon Meads; Editing by Steve Slater and Will Waterman)