FRANKFURT Buyout group Wendel (MWDP.PA) has put German packaging group Constantia Labels up for sale in a deal that could be worth more than 1 billion euros ($1.1 billion), as it seeks cash for investments in a sister company, two people familiar with the matter said.
Wendel has asked Goldman Sachs (GS.N) to evaluate options including a sale of the group, which is part of its larger packaging firm Constantia Flexibles, after receiving offers from three interested parties.
The investor, which owns 60 percent of Constantia Flexibles, as well as its co-investors are considering using proceeds from a sale of the labels group to fund add-on acquisitions for the remainder of the company, one of the people said.
Constantia Labels is expected to post earnings before interest, tax, depreciation and amortization of 113 million euros this year and could be valued at more than 10 times that, in line with industry peers, the sources said.
Information packages have been sent out and first-round bids are due at the end of May, the people said, adding that there are no plans for a stock market listing of the firm.
Peers such as CCL Industries (CCLb.TO) and Multi-Color Corporation are considering offers, as are private equity groups such as Cinven [CINV.UL] and Blackstone (BX.N), they said.
Wendel, Goldman Sachs and Cinven declined to comment. The others were not immediately available for comment.
Constantia Flexibles was acquired by Wendel for 2.3 billion euros in 2014, after a planned initial public offering by former owner OEP had failed a year earlier. The investor has since strengthened the group, which employs 10,000 staff, with several acquisitions.
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 internally separated last year.
Constantia Labels posted a 2016 EBITDA of 100.8 million last year on sales of 605 million euros. According to its business plan, EBITDA could grow to 167 million by 2021.
(Additional reporting by Alexander Hübner; Editing by Maria Sheahan and David Evans)