French listed private equity investor Eurazeo and US private equity firm Carlyle have announced they have entered into exclusive negotiations with French buyout firm LBO France to sell Terreal for €860 million ($1 billion).
Carlyle and Eurazeo joined together to fund the €400 million buyout of the French tiles and bricks manufacturing unit in September 2003 from Terreal’s parent company Saint-Gobain.
LBO France reportedly beat off competition from a number of trade buyers and also from other private equity firms, including PAI Partners.
Terreal is one of the largest clay tiles and brick producers in Europe with operations in France, Italy, Spain, Malaysia and the US. The company estimates it has a 35 percent share of the French clay tile market.
The original transaction, in which Carlyle acquired a 60 percent stake in Terreal, was the firm’s eighth buyout in France, where the firm has an office in Paris.
Eurazeo, which is selling the remaining 40 percent stake in Terreal, is listed on the French stock exchange Euronext and has a market capitalisation of €3.8 billion.
Yesterday, the firm announced the acquisition of budget French hotel chain B&B Hotel from a consortium led by Duke Street Capital for an undisclosed sum.
The proposed Terreal acquisition is the second in a week for LBO France, following the announcement that it is in advanced negotiations with fellow French buyout firm Wendel Investissement to acquire Wheelabrator Allevard for €415 million.