A sale of Dutch meat producer Vion's ingredients division is gathering pace, attracting a long line up of potential buyers starved of M&A activity so far this year, banking sources said on Wednesday.
Owned by ZLTO, a Dutch agricultural and horticultural association, VION is looking to cut debt from a deal which could fetch between 1.4 billion euros and over 2 billion euros, bankers said.
Bank of America Merrill Lynch is running the sale and first round bids in an auction process are due July 23, bankers said.
VION has earnings before interest, taxes, depreciation and amortisation (EBITDA) of around 200 million euros ($255.72 million).
The sale is attracting a number of trade and private equity buyers which could submit first round bids including Advent International, Apax, Bain, BC Partners, Blackstone, CVC, Cinven and KKR , bankers added.
All of the buyout houses either declined to comment or were not immediately available to comment. ZLTO was not immediately available to comment and Bank of America Merrill Lynch declined to comment.
Vion declined to comment on details of the sale process but a spokesman said: "There is great interest in our Ingredients activities, both from business players as well as private equity. We expect the sales process to be realised by the end of the year."
Carve Out
"This is a business which is being spun out of a food group and is a classic carve out story. It is a pretty juicy asset for private equity as there is lot of opportunity to grow the business through cost cutting measures and by making acquisitions globally. It is the perfect private equity story," one of the bankers said.
Bankers are putting together debt packages to offer to potential buyers in order to help back a buyout.
Debt could total between 700 million euros to 1 billion euros and consist of both leveraged loans and high yield bonds denominated in euros and dollars, bankers said.
Bank of America Merrill Lynch could offer a staple financing, which gives would-be buyers confidence that funds are available for a deal, bankers added.
VION Ingredients employs 6000 staff and produces gelatine, proteins and fats from slaughterhouse by-products which are then sold to the pharmaceutical, cosmetics, food, feed, energy and technology sectors, according to Vion's website.
