Private-equity firm Cinven Ltd., which bought German ceramic components maker CeramTec in 2013 for about 1.5 billion euros ($1.7 billion), is exploring an initial public offering for the asset, according to people with knowledge of the situation.
The transaction could take place toward the end of this year or early in 2016 and value the business at more than 2 billion euros, said the people, who asked not to be identified because the plan is private. The buyout firm has begun preliminary talks with banks, though it hasn’t taken a final decision yet on whether to proceed, they said.
While the focus is currently on an IPO, an outright sale of the business is also an option, the people said. A spokeswoman for Cinven declined to comment.
CeramTec, founded in 1903 as a porcelain factory, has more than 3,600 employees worldwide and makes ceramic parts for replacement knees and hips as well as components for the electronic and auto industries. The company, based in Plochingen, Germany, got its current name after Dynamit Nobel’s Cerasiv unit took over Hoechst CeramTec. Rockwood agreed to buy the business in 2004.
Cinven beat competing interest from Permira Advisers LLP and Blackstone Group LP when it bought the company, whose rivals include Morgan Advanced Materials Plc of the U.K.