Private equity investment firm Clayton, Dubilier & Rice Inc is selling Mauser Group NV to Stone Canyon Industries LLC for $2.3 billion in cash, a day before the packaging products maker was to list on the New York Stock Exchange.
The investment firm had planned to list Mauser, which manufactures plastic, fibre and composite packaging, through an initial public offering that valued the company at more than $1 billion.
The Mauser deal is the second such transaction this year, coming just ahead of a planned listing, as firms find more value in buyouts amid a still-tepid IPO market.
Software maker AppDynamics agreed last month to a $3.7 billion takeover by Cisco Systems Inc (CSCO.O), just two days before its market debut.
Mauser's sales rose 9 percent annually in the past three years and debt fell to 5.4 times EBITDA from over six times since it was acquired by Clayton, Dubilier & Rice (CDR) in 2014, a person familiar with the deal told Reuters.
The investment firm had acquired Mauser for 1.2 billion euros ($1.28 billion).
Stone Canyon will not merge its existing rigid metal and plastic containers business BWAY Corp with Mauser, the source said.
Mauser declined to comment, while Stone Canyon could not be reached immediately for a comment.
Bank of America Merrill Lynch and Citigroup were financial advisers to CDR, while Latham & Watkins LLP was legal counsel. Goldman Sachs was financial adviser to Stone Canyon, while Gibson, Dunn & Crutcher LLP was legal counsel.
($1 = 0.9369 euros)
(Correct source in paragraph 7)
(Reporting by Rahul B and Sanjeeban Sarkar in Bengaluru; Editing by Saumyadeb Chakrabarty)