European Capital SA Sicar, a private-equity and debt investment firm, is considering a sale of luxury paintmaker Farrow & Ball Ltd., according to people familiar with the matter.
European Capital has held talks with investment banks in the past month to look at options for the business, which could include a sale of the Wimborne, Dorset-based company, said three people who asked not to be identified because the talks are private. The asset could fetch as much as 300 million pounds ($506 million), two of the people said.
Europe’s paint industry has attracted U.S. competitors including PPG Industries Inc. (PPG) and Valspar Corp. (VAL), and the U.K. is considered one of the brighter spots by regional leader Akzo Nobel NV. (AKZA) Known for its heritage shades that draw on nostalgia for Georgian hues, Farrow & Ball would also be a candidate for an initial public offering, appealing to investor demand for luxury consumer companies, one person said.
Founded in 1952, Farrow & Ball sells decorative paint for interior and exterior use as well as wallpaper. With shades including Elephant’s Breath, Dead Salmon and Nancy’s Blushes, Farrow & Ball is an opportunity to buy into the top-end paint market as the U.K. economy recovers. Nationwide and Hometrack both reported an increase in house prices in March, while Markit Economics said the pace of homebuilding accelerated.
Farrow & Ball had sales of 50 million pounds for the year ended March 31, 2013, according to filings at the U.K.’s Companies House. The private-equity firm paid 126 million euros for a majority stake Farrow in August 2006 through a combination of equity and loans according to European Capital’s website.
A spokeswoman for European Capital didn’t respond to telephone and e-mail requests seeking comment. An official at Farrow & Ball wasn’t immediately available for comment.
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