Second Round Bids Due for Europris

Second round bids are due for Norway-based discount retail store Europris. The company, owned by IK Investment Partners, has attracted interest from buyout shops Nordic Capital and Warburg Pincus. Europris could reportedly fetch 400 million euros ($546.2 million) and 500 million, Reuters reported Monday.

(Reuters) – A handful of buyers are still in the running to buy Norway-based discount retail store Europris from IK Investment Partners, with second round bids due in the coming weeks, sources close to the deal said.

Private equity firms Nordic Capital and Warburg Pincus are among those interested in the company, which could fetch between 400 million euros ($546.2 million) and 500 million.

JP Morgan is running the sale, the sources said.

If a private equity sponsor is successful, the acquisition will be financed though a leveraged buyout (LBO) which is likely to be backed by around 200 million euros of debt, the sources said.

The company has earnings before interest, taxes, depreciation and amortisation (EBITDA) of around 50 million euros and total leverage as part of the acquisition could be 4 to 4.5 times EBITDA, the sources added.

Europris has gained significant attention from potential buyers attracted to the prospect of owning discount stores, which have performed well during the downturn as consumers seek cheaper goods, the sources said.

Warburg Pincus already owns discount retailer Poundland, which it acquired from Advent International in 2010 for around 200 million pounds ($313.4 million) backed by 85 million pounds of debt according to Thomson Reuters LPC data.

IK Investment Partners acquired Europris in 2004 through the acquisition and integration of three Nordic businesses. Europris operates more than 180 stores in Norway and six in Iceland. The stores are operated partly as owned stores and partly as franchisees. ($1 = 0.732 Euros) ($1 = 0.638 British Pounds) (Reporting by Claire Ruckin; Additional reporting by Isabell Witt; Editing by David Holmes)