Reuters – BC Partners Sees Bids for Starkstrom

Private equity firm BC Partners has attracted first-round offers for SGB Starkstrom, a manufacturer of power transformers, two sources close to the matter told Reuters. BC Partners, which has mandated Goldman Sachs to organize the sale, hopes fetch up to 1 billion euros ($1.24 billion), the sources said on Thursday, adding that more bids could emerge.

 

(Reuters) – Private equity firm BC Partners has attracted first-round offers for SGB Starkstrom, a manufacturer of power transformers, two sources close to the matter told Reuters.

 

BC Partners, which has mandated Goldman Sachs to organize the sale, hopes fetch up to 1 billion euros ($1.24 billion), the sources said on Thursday, adding that more bids could emerge.

 

“If the price is too low, BC Partners won’t sell,” one of the sources said, adding that the operating performance of SGB was strong and there was no need to rush the divestment process.

 

Among the handful of strategic bidders is China’s State Grid , the sources said. No private equity investors have submitted offers, they said.

 

BC Partners and Goldman Sachs declined to comment. State Grid was not immediately available to comment.

 

SGB Starkstrom, a leading manufacturer for electricity power transmission devices, employs roughly 1,300 workers. In 2010, the Regensburg, Germany-based company posted sales of 580 million euros and a net profit of 13 million euros.

 

Originally, SGB Starkstrom was part of Germany’s second-biggest utility, RWE. It was sold to private equity group HCP Capital Group in 2004 and then to BC Partners in 2008.

 

BC Partners started the sale process after being asked about the asset by several strategic players, the sources said.

 

While industrial conglomerate Siemens is unlikely to bid due to potential antitrust problems, peer ABB may express interest, they added.