(Reuters) – Bankers are preparing debt financing packages of around 250 million pounds (US$400.7 million) to back private equity firm Warburg Pincus‘ potential sale of U.K. survival equipment company Survitec Group, banking sources said on Thursday.
Warburg Pincus bought Survitec in 2010 for 280 million pounds from Montagu, backed with 175 million pounds of leveraged loans, according to Thomson Reuters LPC data.
It decided to explore a sale of the company earlier this year, which could fetch in excess of 500 million pounds.
Around six potential buyers have made it through to a second round of bidding in an auction process, including Blackstone, which has teamed up with U.S. gun holster manufacturer Safariland. Other buyout firms close to the process include Clayton Dubilier & Rice, Ontario Teachers’ Pension Plan, Onex Corp and Wendel, banking sources said.
The sale is expected to conclude by the end of 2014, the banking sources added.
Blackstone, CD&R, Onex and Warburg Pincus declined to comment. Ontario Teachers’ Pension Plan, Safariland and Wendel were not immediately available to comment.
Around 250 million pounds of debt equates to around 5-5.5 times Survitec’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) of approximately 44 million pounds, the banking sources said. Debt is expected to include senior leveraged loans.
Survitec provides survival products from lifejackets to anti-gravity suits to the marine, aviation and defence industries among others.
By Claire Ruckin
(Editing by Christopher Mangham)
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