Buyout firms Nordic Capital and KKR & Co (KKR.N) are competing to acquire Hyperion, a U.S. manufacturer of metal cutting and drilling equipment owned by Swedish engineering company Sandvik AB (SAND.ST), according to people familiar with the matter.
Sandvik has asked potential buyers to submit binding offers for Hyperion by next month, the sources said this week. A deal could value Hyperion at more than $400 million, the two sources added.
The sources asked not to be identified because the negotiations are confidential. Nordic Capital and KKR declined to comment, while Sandvik did not immediately respond to a request for comment.
Sandvik Chief Executive Bjorn Rosengren said last month he expected to clinch a deal for Hyperion by the end of the year.
Sandvik is in the midst of a restructuring drive to shed unloved businesses and boost profitability that has historically lagged that of its fierce domestic rival Atlas Copco AB (ATCOa.ST).
Nordic Capital’s interest in Hyperion is unusual given that the private equity firm typically pursues deals in the Nordics and Northern Europe, and ventures globally only for healthcare deals. Last year, it acquired Philadelphia-based contract research organization ERT from buyout firm Genstar Capital for $1.8 billion, including debt.
KKR, which raised a $13.9 billion private equity fund this year to invest in the Americas, has been willing to acquire smaller companies as it pursues strong returns. Most of its U.S. acquisitions are typically in the $1 billion to $5 billion range.
Based in Fair Lawn, New Jersey, Hyperion was created by Sandvik through the merger of Diamond Innovations Inc, the former superabrasives division of General Electric Co (GE.N), with Sandvik’ hard materials business. It has 12-month earnings before interest, taxes, depreciation and amortization of $45 million.