Kloeckner Pentaplast Owners Said to Seek Sale Amid Recovery
Kloeckner Pentaplast GmbH’s owners are seeking a buyer for the plastic-packaging producer after boosting profits and cutting debt since they acquired the company from Blackstone Group LP (BX) one year ago, according to people with knowledge of the matter.
The group of lenders led by hedge fund Strategic Value Partners is working with Goldman Sachs Group Inc. and Jefferies Group LLC to gauge interest among rivals and private-equity funds, said the people, who asked not to be identified because talks are private.
A sale process, which may value Kloeckner Pentaplast, based in Montabaur, Germany, at more than 1 billion euros ($1.3 billion), may start as early as September, the people said. Spokesmen for Kloeckner Pentaplast and Strategic Value Partners declined to comment.
Strategic Value Partners, based in Greenwich, Connecticut, and its partners acquired the 48-year-old company from Blackstone in June 2012 after Kloeckner Pentaplast breached loan terms in 2011. The consortium raised enough financing to prepay 800 million euros, cutting Kloeckner Pentaplast’s total debt to 630 million euros from 1.26 billion euros after the lenders converted their debt into equity. At the same time, the company also posted rising earnings.
Kloeckner Pentaplast reported 153 million euros in adjusted earnings before interest, taxes, depreciation and amortization on revenue of 1.2 billion euros in the last financial year. It has about 3,000 employees globally and operations in 12 countries with 18 production sites.
The company, whose products include shrink-wrapping for foodstuffs, pipe insulation and packaging for pharmaceuticals, was originally part of Kloeckner-Werke AG, which is now a unit of steel product-maker Salzgitter AG. (SZG) Kloeckner Pentaplast was jointly acquired by Cinven LLP and JPMorgan Chase & Co. in 2001, before being sold to Blackstone in 2007, according to the company’s website.
The company’s 225 million-euro pay-in-kind notes maturing in 2017 were quoted at 1,252 basis points more than government debt, down from 1,274 basis points on June 13, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.
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