April 26, 2017 / 1:47 PM / 4 months ago

LPC-Bankers line up €570m of debt for Faerch as sale heats up

LONDON, April 26 (Reuters) - Bankers are lining up to around €570m of debt financing to back a potential sale of Danish packaging group Faerch Plast as the auction process progresses to the final round, banking sources said on Wednesday.

Swedish buyout firm EQT, which bought Faerch in 2014, hired Credit Suisse and investment banking boutique FIH Partners to organise a sale process earlier this year.

Around seven potential buyers have made it through the second round of bidding on May 31 that could see Faerch fetch up to €800m, the sources said.

Bidders include private equity firms Advent International, Nordic Capital, PAI Partners, Partners Group and Carlyle through its paper and plastic packaging company Novolex that it acquired in November, as well as strategic bidders RPC Group and Sonoco, the sources said.

EQT, Carlyle and RPC were not immediately available to comment, the rest of the bidders declined to comment.

Bankers are working on debt packages to back the bids by buyout firms. Some €570m of debt financing equates to 6.5 times Faerch’s approximate €70m-€80m Ebitda, including undrawn debt, the sources said.

Debt is expected to be in the form of euro-denominated leveraged loans, the sources said.

Under EQT’s ownership, Faerch has grown with the 2015 acquisitions of Anson Packaging and Sealed Air's European tray business.

The company has production sites in Denmark, the UK, the Czech Republic and Spain and employs 1,100 staff. It makes rigid plastic trays primarily for food producers and retailers.

Editing by Christopher Mangham

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