Wendel Said to Seek Materis Refinance Ahead of IPO

French investment firm Wendel SA plans to refinance debt at its Materis SAS building materials business before a possible initial public offering of the unit, according to people with knowledge of the matter.

An initial share sale of the maker of building-material additives and paint, in which Wendel owns a 76 percent stake, may take place once it obtains new borrowings, said the people, who asked not to be identified because the process is private. Wendel may replace existing loans of about 1.3 billion euros ($1.8 billion) at Materis with new debt maturing later, one of the people said.

Wendel, France’s largest publicly traded investment firm, is preparing to sell the business after almost eight years of ownership. The company failed to get high enough bids in a separate attempt to sell one Materis division making mortars. Businesses such as Parex mortars and Chryso adjuvants may now be sold together in the IPO to take advantage of buoyant stock markets, said the people.

BNP Paribas SA was among lenders that provided 1.97 billion euros of loans to finance Wendel’s purchase of Materis in 2006, Bloomberg data show. Efforts to refinance Materis started in 2012 when Paris-based Wendel extended its debt maturity and first tried to find a buyer for its aluminates division Kerneos.

Kerneos Sale

It finally entered into exclusive talks to divest that business to Astorg Partners, with a transaction scheduled to be completed by mid-year. Wendel has said the sale of Kerneos to Astorg will reduce Materis’s debt by 600 million euros to “a bit more” than 1.3 billion euros.

Spokespeople for Wendel and Materis weren’t available and didn’t respond to calls and emails seeking comment on the refinancing and a potential IPO.

Wendel is in the process of choosing arrangers for the refinancing, the people said. It’s seeking debt with five- to seven-year maturities, one of the people said.

The stock was little changed at 99.16 euros as of 11:03 a.m. in Paris trading, valuing Wendel at 4.8 billion euros. In 2013, the stock had gained 36 percent, while the SBF 120 index had risen 19 percent.

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