March 29, 2011 3:55 pm

Leonard Green and CVC join Big Lots auction process

This article is provided to readers by dealReporter—a news service focused on providing insightful intelligence on event driven situations to investors.


Several private equity firms are receiving management presentations from Big Lots (NYSE:BIG), two sources familiar with the process told dealReporter.

Some of the financial sponsors have formed consortiums to bid on the Columbus, Ohio-based closeout retailer. TPG and Bain Capital have formed one group, while Leonard Green & Partners and CVC Capital Partners have joined forces for another, these sources said. Thomas H. Lee Partners, meanwhile, may be working on it own, said the first source.

The next round of bids is expected around 20 April, although the date is not set in stone and could change depending on the progress of ongoing due diligence by potential suitors, the sources said.

Goldman Sachs, the financial advisor to Big Lots, is running “a robust sale process,” a third source said. However, bidders are intent on taking their time with due diligence, this source added.

Since the indicative bid round which took place on 11 March and prior, parties that “were too far away” from a USD 40 per share price were not asked to participate in the next round of the auction, according to the third source.

This new service previously reported that Goldman Sachs is likely looking for a sale at the higher end of a 10.5-11x EBITDA range.

The third source and an industry source following the auction described this price tag as “extortionate.” This news service previously reported that Big Lots could be levered up 6.5x EBITDAR.

(Additional reporting by Mike Stone)


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