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Blackstone pursues sale or IPO for Polymer Group Inc; deal could approach $3 bln

Blackstone Group is shopping specialty materials company Polymer Group Inc. to prospective buyers in a deal that could approach $3 billion in value, according to a source familiar with the process. The firm is said to be preparing the company for either a sale or IPO.

Citigroup is advising on the process, which may or may not lead to a transaction, according to a second source. It isn’t clear when the company went on the market, but our first source said management made presentations to prospective buyers within the last two months. The same source said that in a sale the company could be expected to fetch upwards of 10x the roughly $270 million in adjusted annual EBITDA that it generates.

Buyout shops that could have an interest in Polymer Group include Advent International, Apollo Global Management, Carlyle Group, Golden Gate Capital, Kohlberg Kravis Roberts & Co and Onex Corp.

Blackstone announced plans to acquire Polymer Group in a take-private transaction in late 2010 for $326.2 million in cash, according to Reuters news service. The firm used its vintage 2006, $21.7 billion Blackstone Capital Partners V LP to acquire the company from distressed debt specialist MatlinPatterson and affiliates, which held 63.4 percent of the voting power of the company’s shares.

Based in Charlotte, N.C., Polymer Group makes materials used in health care products such as surgical gowns and face masks, as well as in consumer products such as wipes and diapers. The company, which employees about 4,750 people, generated adjusted EBITDA of $73.5 million in the first quarter, up 51.2 percent from the year before. Acquisitions, higher demand for core products and the company’s management of raw material costs, among other factors, accounted for the growth, according to a press release. Net sales in the quarter rose 9.1 percent to $461.2 million.

Executives at Blackstone declined to comment, while those at Polymer Group and Citigroup couldn’t be reached for comment.

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