LONDON/DUBAI (Reuters) – Carlyle, Cinven, CVC and General Atlantic are among firms preparing binding bids for port and shipping agent Inchcape Shipping Services (ISS), people familiar with the matter said.
ISS’s owner Istithmar, the investment arm of Dubai World, hopes to raise more than $700 million through the sale, people have said previously. Its debt-laden parent is undergoing a $9.5 billion government rescue.
Second-round bids will be due in several weeks, some of the people said.
A much bigger field of private equity firms earlier showed interest in the fast-growing, asset-light business, but several did not lodge initial bids earlier this month, apparently concerned the auction was too competitive.
Apax [APAX.UL], Bridgepoint [BRDG.UL], Montagu Private Equity, Permira [PERM.UL] and TPG [TPG.UL] were among early suitors that did not bid, some of the people said.
ISS had earnings before interest, tax, depreciation and amortisation (EBITDA) of about $70 million in 2009 and is likely to earn closer to $80 million this year, people familiar with the matter said earlier this month.
With a staple debt package of about 5 times EBITDA available and bidders willing to pay about 10 times in total, that means bidders are likely to offer some $750 million.
The private equity firms either declined to comment or had no immediate comment. ISS had no immediate comment. (Reporting by Quentin Webb, Simon Meads and Victoria Howley in London with Nicolas Parasie in Dubai; Editing by David Holmes)