LONDON (Reuters) – UK-based private equity group Silverfleet Capital has begun exclusive talks to buy German sausage casing maker Kalle Nalo from rival group Montagu Private Equity, the Financial Times newspaper reported on Friday in an unsourced story.
Citing people “familiar with the situation” the paper said Silverfleet Capital, the former buy-out arm of Prudential, is close to agreeing a deal to buy Kalle Nalo for about $350 million, though talks could still collapse at any time.
In June, Reuters reported that a group of seven or eight banks were working on a financing package for the purchase. [ID:nL51006440]
Montagu Private Equity had appointed Sal Oppenheimer to advise on the possible sale of Kalle and had discussed a possible club financing to back the deal with banks.
Progress on the sale has been slow, in line with other European auctions due to the scarcity of debt financing and private equity firms’ struggle to achieve target returns on debt-financed deals.
CVC Capital Partners sold Kalle Nalo to Montagu in 2004 for an undisclosed price, backed by a leveraged loan from Mizuho.
Before it was acquired by CVC, Kalle was a subsidiary of Hoechst. Kalle produces artificial sausage casings out of viscose, plastic and textiles. The company also manufactures sponge cloths.
(Reporting by Stefano Ambrogi; Editing by Bernard Orr)