(Reuters) — Private equity firm Apollo Global Management (APO.N) has won the bidding for Saint-Gobain‘s glass bottle unit Verallia with an offer valuing the business at 2.95 billion euros ($3.27 billion), the French building materials group said on Monday.
Saint-Gobain said it had entered exclusive talks with Apollo to close the deal. Apollo saw off four other bidders — the Portuguese industrial group Ba Vidro and three other funds, Blackstone, CVC Capital Partners [CVC.UL], and Ardian.
Verallia, which manufactures glass bottles and jars and is the main supplier of bottles for France’s champagne and cognac industries, generated 2.39 billion euros in sales and 230 million euros in operating income last year. It has 47 plants in 13 countries and employs nearly 10,000 people.
Finance director Laurent Guillot said net proceeds of 2.5 billion euros would go toward reducing Saint Gobain’s debt after tax, payments to minorities and worker pension costs.
Guillot said the sale price represented an earnings multiple of 7.4 times EBITDA and 12.8 times EBIT.
Separately, Apollo is in talks to sell a minority stake in the group to France’s state-backed investment fund, Bpifrance, after Economy Minister Emmanuel Macron earlier this year promised the company’s 2,200 French workers he would look after them.
“Saint-Gobain chose Apollo for the quality of its offer and its support for the industrial project and for Verallia’s employees,” the company said in a statement.
A statement from Bpifrance may come as early as Monday. The fund habitually buys stakes of between 10 and 15 percent.
Apollo, which is based in New York, has experience in France including recent investments in debt-laden aircraft equipment maker Latecoere (LAEP.PA).
Saint-Gobain, which is selling Verallia to focus on its main business of construction and building materials, earlier tried unsuccessfully to float the unit and sold the North American part of Verallia in April last year.
Saint-Gobain put the remains of Verallia up for sale in October, at the same time as it announced plans to buy control of Swiss chemicals firm Sika, a deal which has run into strong opposition.
It expects the Verallia deal to close by the end of the year once regulatory clearances, including one required by the European Commission, are obtained.
(Reporting by Leila Abboud and Andrew Callus; Editing by Louise Heavens and Keith Weir)