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Advent in Discussions to Buy Oberthur Unit for $1.6 Billion

Advent International Corp., the Boston-based leveraged buyout firm, is in exclusive talks to buy 90 percent of Francois-Charles Oberthur Fiduciaire SA’s smartcard unit.

The deal would value the business at about 1.15 billion euros ($1.6 billion), the firm said in a statement today. The founding Savare family plans to keep 10 percent of the unit, whose security and identification technology is used in the mobile telecommunications, payment and transport industries.

“We want to help the company grow internationally in emerging markets like Brazil, as well as in countries like the U.S. where smartcards could be more developed,” Pascal Stefani, head of Advent in France, said in an interview.

The business provides smartcards used in mobile phones and credit cards and had sales of about 713 million euros last year, or more than 70 percent of Oberthur’s revenue. Advent, which manages 6.6 billion euro buyout fund, had vied for the unit with private-equity firms such as Bain Capital LLC and PAI Partners, people familiar with the matter said in June.

The transaction requires workers’ council consultation and is subject to the approval of market authorities, Advent said. The buyout firm plans to use debt equivalent to 4.5 times the unit’s earnings before interest, taxes, depreciation and amortization to help fund the deal, Stefani said.

Barclays Plc, Lloyds Banking Group Plc and Royal Bank of Canada are arranging debt financing. HSBC Holdings Plc is advising Advent on the acquisition and Rothschild is advising Oberthur.

Banknote Acquisitions?

Oberthur is seeking to boost its banknote business through acquisitions, Chief Executive Officer Thomas Savare said this year. The French company, based near Paris, made an indicative 896 million-pound ($1.5 billion) cash offer for Britain’s De La Rue Plc (DLAR), the largest printer of banknotes, in December.

De La Rue rebuffed the approach and Oberthur abandoned its pursuit in January. Under the U.K.’s so-called put-up-or-shut-up rule, the French company was barred from making another attempt to buy the U.K. printer for six months after that.

To contact the reporter on this story: Anne-Sylvaine Chassany in London at achassany@bloomberg.net;

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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