Investcorp mandates Barclays for Armacell sale
Frankfurt, October 17, 2012
Bahrain-backed private equity group Investcorp has mandated Barclays to organise the sale of Armacell, a maker of insulation materials, aiming to capitalise on growing investor interest in energy-efficient products.
"We hope to enter exclusive negotiations with one bidder early next year and close the deal by the end of the first quarter," Armacell CEO Patrick Mathieu told Reuters, adding that Barclays has helped line up talks with several private equity investors and strategic players.
"In my eyes, it is worth more to a private equity investor than to a strategic one," Mathieu said, adding that financial investors were more likely to be able to stump up more cash to drive Armacell's expansion.
German-headquartered Armacell says it is the world's largest maker of flexible insulation, claiming 40 per cent of the market, with its products used to lag pipes and ductwork in large buildings such as factories and schools.
"Our two main growth drivers are sound absorption products and a push into Asia and Russia," Mathieu said.
The company's sales grew about 50 per cent in the five years since Investcorp bought the business in 2006 to some 441 million euros ($574 million) expected this year, as regulations governing the energy efficiency of buildings have become stricter in many parts of the world.
It generates about 60 per cent of group sales outside of Europe, which Mathieu said made Armacell more resilient to any economic downturn in the region, and is benefiting from a shift to high-tech products from traditional insulation materials.
In 2013, Armacell expects to post earnings before interest, tax, depreciation and amortisation (EBITDA) of 70 million euros, up from 64 expected for 2012.
"Our peers trade at (EBITDA) multiples of 7-9," Mathieu said. "We see ourselves at the higher end of this range."
If valued accordingly, Investcorp - which according to media reports bought Armacell for 350-400 million euros in 2006 - could fetch a price tag of up to 630 million euros in the sale.
Armacell could be interesting for industrials groups such as 3M, BASF, or foams-to-plastics group UFP Technologies, sources close to the transaction said.
Investcorp declined to comment. – Reuters
More Finance & Capital Market Stories
- Gulf Capital to raise $360m partly for dividend
- Apicorp posts $109m profit in 2012
- Al Baraka summit to discuss financial trends
- Bahrain real GDP grows 3.9pc in 2012
- Deutsche Bank named top FX bank in Mideast
- Doha bourse breaks key 9,000 level
- UAE economic growth hits 4.4pc in 2012
- DFM firms achieve 100pc compliance
- NBK Egypt unit Q1 profit up 15.3pc
- Barclays names key official for Abu Dhabi