Three private equity groups shortlisted in Xella sale, say sources: Reuters

Bain, Apollo and Lone Star have been shortlisted in the sale of building materials maker Xella, a potential 2 billion euro ($2.18 billion) deal, according to several people close to the transaction.

The three private equity groups have been asked to produce final bids in coming weeks, the people said.

Bankers close to the deal said they were working on debt financings of around 1.5 billion euros or 5.5‎ times Xella’s annual core earnings of 270 million euros.

Xella’s owners – PAI Partners and Goldman Sachs’ investment arm – are hoping to sell the group at an expected valuation of eight times core earnings, sources close to the deal have said in the past.

Listed sector peers such as Wienerberger, Braas Monier or Etex trade at roughly six to seven times their expected core earnings.

The private equity groups and Xella’s owners declined to comment.

An attempt to float Xella, whose brands include Ytong, Hebel and Silka, on the stock exchange failed last year.