PARIS/LONDON (Reuters) - Buyout firm Astorg Partners has hired Goldman Sachs (GS.N) to look for a buyer for France’s leading funeral services firm, OGF, sources familiar with the mandate said.
The auction of the company, which Astorg acquired for an enterprise value of roughly 300 million euros ($393 million) in 2007, is in its early stages and could be complicated by the links between economic growth - at a virtual standstill in France - and willingness to spend on funeral services.
Still, OGF has earnings before interest, taxes, depreciation and amortization (EBITDA) of about 100 million euros, so could sell for 800 million to 1 billion including debt, based on typical multiples for such deals, one of the sources said.
OGF had 2012 revenue of 533 million euros, representing about a quarter of the French funeral services industry, according to its website.
Astorg Partners and Goldman Sachs both declined to comment.
The sale would be the latest in a series of efforts by private equity firms to sell on companies bought in 2006-2007 when the European buyout market was booming, helped by a ready supply of debt.
The market - particularly in France - has slowed to a trickle as of late as many buyout firms have had trouble attracting interest from other funds for businesses which have already cut costs under a previous round of owners.
OGF, which has more than 5,500 employees, is itself on at least its second private equity buyer, and the 170-year-old firm was owned in the latter part of the 1990s by U.S. funerals company Service Corporation International.
Among firms similar to OGF elsewhere in Europe, Britain’s Dignity Plc (DTY.L) last month forecast a profitable 2013 and raised its dividend in a sign of confidence that customers would not cut spending on last rites.
But the top Spanish funeral services company, Memora, has been hit by the country’s deep recession, its private equity owner 3i (III.L) said recently, cutting its valuation by 45 million pounds ($68.9 million) to 74 million.
“It’s a GDP-driven business,” one of the sources said, noting that Memora had seen a “dramatic drop-off” in Spain, where he said many had been opting for cut-rate coffins as the country’s steep recession bites.
Astorg has been relatively active in what has been a quiet market, acquiring the microconnections unit of France’s FCI from Bain Capital in 2011 and earlier this month buying U.S.-based radioactivity measuring business Canberra from French nuclear group Areva AREVA.PA.
($1 = 0.7643 euros)
($1 = 0.6531 British pounds)
Editing by James Regan