Charterhouse Said to Seek 2 Billion-Euro Staple for Ista
Charterhouse Capital Partners LLP, a London-based buyout firm, is seeking financing of more than 2 billion euros ($2.5 billion) for potential buyers of German energy-metering business Ista International GmbH, according to people familiar with the offer.
Banks are offering so-called staple financing of about 7 times Ista’s estimated earnings before interest, tax, depreciation and amortization of about 315 million euros, said three of the people, who asked not to be identified as talks are private. Private-equity firms often arrange staple financing to support a sale, as it shows other buyout firms an estimate of how much debt the deal can draw and the return they can achieve.
Charterhouse plans to kick off the Ista sale in the first half and will seek more than 3 billion euros, the people said. The banks offering the most attractive staple financing will probably get the advisory mandate, which could be awarded by the end of this year, the people said. Some of the banks approached for staple financing have offered put up the full amount, one person said.
Ista, based in Essen, Germany, provides electricity, water, heat and gas-meter reading services and hardware to property managers, home owners and utilities in 25 countries. The company may benefit from tougher European Union rules that require energy distributors to save 1.5 percent of their sale volumes annually, as part of efforts to meet the EU’s target of 20 percent energy savings by 2020.
Charterhouse declined to make officials available for comment. A CVC Capital Partners Ltd. spokeswoman declined to comment. An Ista spokesman couldn’t be immediately reached for comment.
Ista could be one of the largest private-equity asset transactions in Germany next year. Springer Science & Business Media, the German academic publisher being sold by EQT Partners AB and state owner, may fetch between 3 billion euros and 4 billion euros, people familiar with the sale said last month.
Charterhouse bought Ista from CVC Capital Partners Ltd. for 2.4 billion euros in 2007. CVC re-invested part of the proceeds to buy a stake in Ista. Goldman Sachs Group Inc. (GS) and Deutsche Bank AG advised CVC on the sale at the time, which may make them well positioned to win the M&A mandate, the people said.