Lone Star imposes itself as one of the pioneers of the auction in Saint-Gobain: sources

LONDON (Reuters) – US buyout firm Lone Star has become the leader in buying French construction materials business Saint-Gobain in a deal worth 400 million euros, according to four sources close to the file.

Lone Star uses its Nordic supplier of building materials, Stark, as the unit's acquisition vehicle, known as Raab Karcher, the sources said.

Stark was recently admitted to the second round of an auction process that began in January, sources said.

The Platinum private equity fund also reached the final stages of the process, while its US rival, Advent, initially expressed interest before retiring, he said.

The sources said Lone Star was ahead of Platinum because its commercial offering is more appealing because of the synergies it would achieve by combining Stark and Raab Karcher.

Both funds continue to exercise due diligence before the deadline for final offers in early May, sources said, warning that no agreement was certain.

Saint-Gobain and Lone Star declined to comment, as Platinum was not immediately available.

The sale, led by Goldman Sachs, is expected to be completed next month and could give a value between 300 and 400 million euros, said two sources.

Raab Karcher has an annual profit before interest, taxes, depreciation and amortization (EBITDA) of around 40 million euros and is expected to earn a multiple of no more than 10 times his EBITDA.

The unit has recorded a turnover of nearly 2 billion euros in 2017, but its margins are reduced in the face of fears of an impending recession that could have a painful impact on businesses. building materials specialists.

In November, Saint-Gobain announced the creation of Raab Karcher as part of a plan to sell its non-core business for a total turnover of 3 billion euros in the context of A strategic redesign supervised by the new general manager of operations, Benoit Bazin.