(Reuters) – Private equity firm Kelso & Co is in advanced talks to sell Custom Building Products Inc to peer Quikrete Companies Inc, in a deal that could value the company at between $700 million and $800 million, three people familiar with the matter said this week.
The people asked not to be named because the matter is not public. Representatives for Kelso and Barclays declined to comment. Quikrete and Custom Building Products did not respond to requests for comment.
Kelso had hired Barclays Plc (BARC.L: Quote, Profile, Research, Stock Buzz) to find a buyer for Custom Building Products, which makes supplies for home furnishings and construction and counts Home Depot Inc (HD.N: Quote, Profile, Research, Stock Buzz) as a primary retail partner, Reuters reported in June.
Kelso bought California-based Custom Building Products for $600 million in 2005.
The private equity firm is among a number of buyout firms looking to divest assets in the housing and building products sector through a public offering or private sale as the U.S. housing market rebounds from a prolonged slump following the credit crisis.
Low interest rates and rising rents have pushed many consumers to buy homes, boosting the outlook for the housing and building products markets.
Based in Atlanta, privately-held Quikrete is the biggest maker of packaged concrete and cement mixes in the United States and Canada, according to its website.
Another building products maker, CPG International Inc, has also been put up for sale by private equity owner AEA Investors LP and has attracted interest from private equity firms TPG Capital LP, Warburg Pincus LLC, Ares Management LLC and Berkshire Partners LLC in deal that could fetch up to $1.5 billion, Reuters reported last month.