Reuters: Private Equity: UPDATE 1-Private equity plans exit spree in Germany-sources

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UPDATE 1-Private equity plans exit spree in Germany-sources Mar 29th 2012, 15:58 Thu Mar 29, 2012 11:58am EDT * BC Partners starts sale of SGB Starkstrom -sources * Montagu presses ahead with sale of BSN Medical -sources * Cognetas preparing to divest Gienanth, ixetic -sources * EQT close to finalize sale of Leybold Optics -sources * Bridgepoint prepares for Aenova divestment -sources By Arno Schuetze and Philipp Halstrick FRANKFURT, March 29 (Reuters) - Buyout firms are putting German assets on the block as recovering markets create the most attractive exit prices for years and put favourable bank financing within reach. "Private equity groups are sitting on a huge pile of assets and there have been very few exits since the financial crisis started," said an investment banker working on several deals. "Now all sponsors are sifting through their portfolios to ready them for a sale - there is big activity in the market," he added. Rainer Langel, Germany head of investment bank Macquarie said: "We will see more transactions starting in the second quarter - mostly with a deal size below a 700 million euros threshold. Financing markets for such deals have opened up." While before the financial crisis banks generously handed out loans for so-called leveraged buy-outs, they have become more prudent now and restrain themselves to smaller amounts. "Many banks are ready to sign up for tickets of up to 50 million euros ($66 million). So in club deals volumes of several hundred million euros are possible again," another banker said. Among others, BC Partners has sent out information memos for the sale of SGB Starkstrom, a manufacturer of power transformers, two sources close to the transaction said. The investor has mandated Goldman Sachs and is hoping for a price tag of roughly 1 billion euros for SGB, which employs roughly 1300 staff, has annual sales of 500 million euros, two sources close to the transaction said. Private equity firm Montagu has sent out information to investors on German bandages maker BSN Medical, after Goldman Sachs and HSBC were appointed as sellside advisers on the deal which could fetch up to 2 billion euros, bankers said. Montagu bought BSN for 1.03 billion euros in December 2005 and this is the third attempt by the buyout house to exit the company after it was forced to abandon a sale in 2008 due to the financial crisis. In 2010 a flotation valuing the company at as much as 2 billion euros failed. Smaller assets are also coming onto the market. Private equity group Cognetas - which has just closed its Frankfurt office - is stepping up preparations to divest its German heavy machinery producer Gienanth and has picked investment boutique DC Advisory to organise the sale, two sources close to the matter said. The producer of engine blocks for diesel and gas engines has sales of about 200 million euros and counts LuK, Cummins, Tognum, General Electric, Daimler, MAN, and Deutz as its customers. Cognetas is also readying a sale of car parts maker ixetic, a source close to the matter said. EQT, the private equity firm backed by Sweden's Wallenberg family, is close to finalizing a deal to sell vacuum technology specialist Leybold Optics to a strategic player, a source close to the transaction said. The group, which EQT bought in 2001 for about 200 million euros, in 2010 posted sales of 140 million euros and operating earnings of 6 million. Buy-out group Bridgepoint is getting ready to sell its German asset Aenova, though a sale will not be launched until later this year, two sources said. "There is no sales process yet," said Heiner Hoppmann, the Chief Executive of the manufacturer of medicines and dietary supplements, which employs 1550 people, has an annual turnover of 262 million euros and operating earnings (Ebitda) of 43 million. The heirs of foundry group Dihag Holding have started the divestment process of the the group which employees 2,000 staff and has a turnover of more than 400 million euros. The owners have mandated Lazard to organise the sale, two sources close to the transaction said. Like private equity groups, industrials are also speeding up divestments of assets they declare as non-core. Celesio, Europe's largest drugs distributor, is expecting bids for its Movianto unit, a service providers catering to drugmakers, after Easter. Steel maker ThyssenKrupp has launched the sale of five non-core assets, which are expected to close within the next couple of months. An official of Cognetas said "We have no specific plans for our German assets." The other companies and banks declined to comment. Link this Share this Digg this Email Reprints

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