Three separate buyout shops are hoping to score paydays of half a billion or better as they auction off two auto parts companies and one electronic payment processor, before an expected increase in taxes next year.
Auto transmission parts distributor Transtar is up for sale in an auction that is likely to fetch about $700 million, people familiar with the matter told Reuters, publisher of Buyouts.
The auction for Transtar is at an advanced stage and about five bidders—mostly private equity firms—remain in the race, the sources said. The sources asked not to be identified because the auction has not been made public.
Linsalata, which specializes in deals that require $10 million to $50 million of equity investment, hopes to complete a deal before the end of the year, the sources said. Linsalata acquired a majority interest in Transtar in August 2005.
BBB Industries LLC, a maker of aftermarket auto parts owned by investment firm
Windjammer has hired JPMorgan Chase to sell BBB Industries about three years after its acquisition, and the firm has attracted interest from several private equity suitors, the people said.
Windjammer, which specializes in deals that require $20 million to $120 million of equity investment, aims to complete a deal by the end of the year, the sources said. They asked not to be identified because they were not authorized to speak to the media.
Windjammer, founded in 1990, has raised four institutional funds totaling over $1.2 billion of capital and is investing out of its latest fund with $575 million in commitments, according to its Web site.
Mobile, Alabama-based BBB manufactures and distributes starters, alternators and power steering products for the automotive, light-truck and heavy-duty vehicle aftermarket in North America. The sale price of $500 million would represent more than 6x BBB’s EBITDA of $80 million, the sources said.
After having avoided the auto industry over the past two years, private equity buyers are showing signs of coming back as U.S. auto sales start to stabilize after their deepest downturn in three decades, bankers said.
Merchant e-Solutions, a payment processor backed by
Redwood City, Calif.-based Merchant e-Solutions has hired JP Morgan and BofA Merrill Lynch as its financial advisors. The company processes more than $14 billion in domestic and international payments for more than 65,000 merchants, according to the Merchant e-Solutions Web site.
Trident Capital invested in Merchant e-Solutions in 2000. It is not clear how much they provided or how much they currently own. A 2005 Trident newsletter says Merchant e-Solutions, at the time, had raised $27 million in capital. Trident’s investment in Merchant e-Solutions came from its fourth fund, which raised $350 million in 2000, according to a press release.
Merchant e-Solutions has roughly $40 million to $45 million of EBITDA. The company is seeking bids of 15x, which could value it at as much as $675 million, sources say.
“They are in the market right now,” said one buyout executive. “They are looking for an aggressive valuation.”
Soyoung Kim is a Reuters correspondent in New York. Luisa Beltran of peHub, a sister Web site to Buyouts, also contributed to this story.