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Owens-Illinois, the listed Ohio-based packaging company, is receiving first round bids next week for its O-I Plastics packaging business, sources close to the situation said.
The company announced in mid-January that it had retained Goldman Sachs to review strategic options for its plastics packaging business, including a possible sale.
The sources confirmed the unit had USD 175m of 2006 EBITDA, and Goldman was thinking about providing staple financing.
Sources said strategics Rexam and MeadWestvaco, and PE firms Apollo and Blackstone are expected to go after the business. One source thought Apollo would be best placed to win the asset since it owns Berry Plastics, the closest peer to Owens-Illinois Plastics. For the 12 months ended 30 September, O-I Plastics had revenues of USD 770m.
Apollo and Graham Partners LP, the US-based private equity firms, bought Berry in a September 2006 USD 2.25bn LBO for 11x its 2005 EBITDA multiple. If Apollo and Graham paid a little less for this business, say a 10x EBITDA multiple, it would represent a USD 1.75bn deal.
Owens-Illinois has a USD 9.35bn enterprise value, and after this disposal, will be focused solely on glass packaging.
Apollo declined comment. Owens-Illinois said the strategic review process is continuing, and it had no further comment on the process at this time.
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