Tomkins taps BofA, Goldman, Morgan Stanley to lead IPO -sources

Thu Dec 5, 2013 1:00pm EST
 
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By Greg Roumeliotis and Soyoung Kim

NEW YORK Dec 5 (Reuters) - Tomkins Plc, a private equity-owned manufacturer of auto parts and building products, has hired Bank of America Merrill Lynch, Goldman Sachs Group and Morgan Stanley to lead an initial public offering that could value the company at as much as $7 billion, people familiar with the matter said.

Onex Corp and the Canada Pension Plan Investment Board (CPPIB), which acquired Tomkins in 2010 for $5 billion including debt, will also explore an outright sale of Tomkins to another company in what is known as a "dual track" process, the people said on Thursday.

Reuters reported on Nov. 22 that the buyout firms were interviewing investment banks to sell Tomkins to another party or float it in the stock market, with a process to explore both possibilities expected to start in the first quarter.

The people asked not to be identified as the matter is not public. Representatives of Tomkins, Onex and Morgan Stanley did not immediately respond to requests for comment. CPPIB, Bank of America and Goldman Sachs declined to comment.

London-based Tomkins has operations in over 30 countries and sells products ranging from power transmission systems to acrylic bathtubs in over 70 countries, according to its website.

It had adjusted 12-month earnings, before, interest, tax, depreciation and amortization of $536 million as of the end of September and net debt of roughly $1.5 billion, according to Onex's third-quarter earnings statement.

The company serves a broad range of sectors including oil and gas, mining, construction, agriculture, transportation, automotive and manufacturing. Its Gates Corp division, which accounts for most of the company's business, is headquartered in Denver, Colorado, and employs more than 14,000 people.

Founded in 1925 as a small manufacturer of buckles and fasteners, the company expanded into a multi-industrial conglomerate through a series of deals, which included the 1987 acquisition of gun maker Smith & Wesson and the 1996 takeover of U.S.-based Gates Corporation. The Gates deal signaled its move into the industrial and automotive markets.   Continued...