Dubai agrees $1.7bn sale of German firm Mauser to CD&R

The deal is one of the largest asset disposals by a state-owned investment fund in the emirate.

Reuters, Bloomberg/Dubai

Private equity firm Clayton Dubilier & Rice (CD&R) has agreed a deal to buy Germany-based packaging group Mauser from Dubai International Capital (DIC) for around €1.25bn ($1.72bn), two sources familiar with the matter said yesterday.

The deal is one of the largest asset disposals by a state-owned investment fund in the emirate since its debt crisis at the turn of the decade, which forced a number of these vehicles to reschedule debt worth billions of dollars.

Reuters reported on Thursday that CD&R was in advanced talks to acquire Mauser, which makes packaging equipment such as cans and drums for transporting medical waste and other hazardous chemicals.

DIC declined to comment, while no one at CD&R could be reached for comment outside of normal business hours.

The Dubai fund, part of Dubai Holding, the personal investment vehicle of the emirate’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, was advised by Bank of America-Merrill Lynch . CD&R was assisted by Credit Suisse, according to the sources.

Mauser was put up for sale earlier this year, having been bought by DIC from JP Morgan’s buyout unit in 2007, in a deal which valued the firm at €850mn.

At one stage it seemed the Mauser sale would be part of an auction involving two other DIC assets - British engineering group Doncasters and German alumina manufacturer Almatis - but this is was scrapped and a sole process for Mauser was pursued.

CD&R edged out interest from a number of other parties, including a joint bid from buyout firm Ardian in combination with industry rival Technoplast and one from Pamplona.

The New York-headquartered fund is lining up a syndicated loan of around 1bn euros to back the purchase, or 6.25 times Mauser’s roughly €154mn in EBITDA (earnings before interest, taxes, depreciation and amortisation).

The loan is likely to be covenant-light and a mix of dollars and euros, split between first and second lien leveraged loans, banking sources had said previously.

Nearly five years after the financial crisis, Dubai’s economy is rebounding, led by its property, trade and tourism industries. While most of the emirate’s state entities restructured debt by extending maturities, they promised full repayment through asset sales. They’re now stepping-up disposals as values improve with the recovery in financial markets.

Investment company Dubai Group sold a 31% stake in Bank Islam in August for $550mn to BIMB Holdings, while DIC sold its stake in Dubai retailer Rivoli Investments to Swatch Group AG in November last year for an undisclosed amount.

Mauser was founded in a small town in the Black Forest in 1896 by Alfons Mauser, son of the inventor of the gun of the same name. The company builds packaging such as drums and cans for transporting chemicals and employs about 4,000 people.

Clayton Dubilier, founded in 1978, bought Ashland’s water-technologies unit for about $1.8bn in February.