U.S. buyout firm Leonard Green & Partners LP has prevailed in an auction to acquire Charter NEX Films Inc, a U.S. manufacturer of specialty films for the food and medical industries, for $1.5 billion, including debt, people familiar with the matter said.
The deal values Charter NEX at around 14 times its 12-month earnings before interest, tax, depreciation and amortization, a frothy valuation for a packaging company that indicates private equity firms are having to pay top dollar to acquire coveted assets amid a buoyant market, the sources said on Sunday.
A deal could be announced in the coming weeks, the sources said, asking not to be identified because the sale process is confidential. Leonard Green and Charter NEX did not respond to requests for comment, while Pamplona Capital Management, the private equity owner of Charter NEX, declined to comment.
Headquartered in Milton, Wisconsin, Charter NEX is a producer of specialty polyethylene film for food and consumer packaging and for industrial and medical applications.
Pamplona acquired Charter NEX from private equity firm Mason Wells in 2015 for an undisclosed amount. A year later, Charter NEX under Pamplona acquired a smaller peer, Optimum Plastics Inc.
Pamplona has been stepping up its asset sales to capture the high prices in the market. Last week, it sold a 33 percent stake in French funeral services provider OGF to Ontario Teachers’ Pension Plan.
Leonard Green is flush with cash, having raised a $9.6 billion private equity fund last year.
(Reporting by Greg Roumeliotis in New York; editing by Diane Craft)