Goldman’s Xella Said to Draw Buyout Firms in $2.3 Billion Sale

  • Apollo, Bain, Lone Star said among buyout firms interested
  • PAI, Goldman to send information to bidders in September

Germany’s Xella International SA is attracting interest from private equity bidders in a deal that could fetch more than 2 billion euros ($2.25 billion) for the building materials maker, people with knowledge of the discussions said.

Buyout funds Apollo Global Management LLC, Bain Capital, Lone Star Funds, Cinven Ltd., Triton Advisers Ltd. and Blackstone Group LP are considering bids for the business, said the people, who asked not to be named because the talks are private. Information is expected to go out to potential bidders this month, the people said.

The company’s owners, PAI Partners and the private equity arm of Goldman Sachs Group Inc., are working with advisers at Morgan Stanley and Goldman Sachs to find a buyer. They bought the company for 1.6 billion euros in 2008 and are making a fresh sales attempt after turning around the business, the people said.

Representatives for Apollo, Lone Star, Cinven, Triton, Blackstone, Morgan Stanley, PAI and Goldman Sachs declined to comment. A representative for Bain didn’t immediately respond to requests for comment.

Xella postponed an initial public offering last year, blaming volatile markets. Still, in June, Moody’s Corp. upgraded Xella’s debt rating to stable from negative after the company carried out a cost-cutting program and in anticipation of improving margins.

Xella, which specializes in construction materials for walls and insulation, has recently appointed a new investor relations manager, which may indicate that the company could be ready to sell to a buyout firm, analysts at Lucror Analytics said in a note this month.

“This suggests that Xella will continue to require an IR person, which could imply that the company will be sold to another PE house, with a bond refinancing to follow,” Lucror said in the note.

    Before it's here, it's on the Bloomberg Terminal.