Onex Said to Seek Sale of Husky Injection Unit That May Fetch $2 Billion

Onex Corp., Canada’s largest private-equity firm, is in talks to sell its Husky Injection Molding Systems unit to rival buyout firms and may reap as much as $2 billion, said people with direct knowledge of the matter.

Onex hired Goldman Sachs Group Inc. and JPMorgan Chase & Co. to handle the auction, said the people, who spoke on the condition of anonymity because the talks are private. Bolton, Ontario-based Husky makes machines that turn resin into plastic products such as bottles and medical syringes.

Private-equity firms are buying and selling assets among each other after a two-year decline in leveraged buyouts left some firms with spare money to invest and others seeking to liquidate older deals. Some of the largest buyouts this year, including Burger King Holdings Inc. and Multiplan Inc., involved companies that were at least partially owned by other private- equity firms. Burger King was the third-biggest buyout in 2010, according to data compiled by Bloomberg.

Onex hasn’t made a decision to sell Husky and hasn’t received any offers for an acquisition, the private-equity firm said in a statement today. Onex said it is continually considering potential opportunities for its operating companies.

Apollo Global Management LLC and Carlyle Group are among the firms weighing a bid, the people familiar with the matter said. Most of the interest in Husky is coming from buyout firms, and some have already met with the company’s management to learn about the business, said the people.

Plastic Bottles

Husky had earnings before interest, taxes, depreciation and amortization of $197 million in the 12 months ended Sept. 30, according to a statement on Onex’s website. Toronto-based Onex bought Husky for about C$960 million ($953 million) in 2007, in a transaction that valued the company at about 9 times trailing 12-month Ebitda.

That transaction allowed Husky Chairman Robert Schad, who founded the company in 1953, to sell his more than 44 percent stake in the company. Husky’s bankers at Citigroup Inc. contacted about 70 potential buyers, and found most of their interest among private-equity firms, Husky said in a 2007 regulatory filing.

Husky said in another regulatory filing that as of 2007 it had a 75 percent market share globally in the sale of equipment that completes the first step in converting polyethylene terephthalate resin into products such as plastic bottles.

To contact the reporters on this story: Jeffrey McCracken in New York at jmccracken3@bloomberg.net Zachary R. Mider in New York at zmider1@bloomberg.net; Cristina Alesci in New York at calesci2@bloomberg.net.

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net.