LONDON May 17 Bankers are preparing around
€800m of debt financing to back a potential sale of German
packaging group Constantia Labels, banking sources said.
Wendel hired Goldman Sachs on the sale of
the group, which is part of a larger packaging firm Constantia
Flexibles. First round bids in an auction process are due at the
end of May.
Some €800m of debt financing equates to around 6.5 times
Constantia Labels’ expected €113m Ebitda, including undrawn
debt, the banking sources said.
Leveraged loans and high-yield bonds are both being
considered, the sources said.
Wendel was not immediately available to comment.
Constantia Flexibles was acquired by Wendel for €2.3bn in
2014, after a planned initial public offering by former owner
OEP had failed a year earlier.
While the combination of the beverages and food labels
operations with the food packaging business made sense at the
time of the planned IPO to present an attractively-sized company
to investors, synergies are limited between the two parts, which
were separated last year.
Constantia Labels posted a 2016 Ebitda of €100.8m last year
on sales of €605m. According to its business plan, Ebitda could
grow to €167m by 2021.
(Editing by Christopher Mangham)