New York buyout firm Kohlberg Kravis Roberts & Co. is getting ready to sell Mannesmann Plastics Machinery GmbH, the world's largest plastics equipment company, The Times of London reported Feb. 17.
KKR bought MPM in 2002. Munich, Germany-based MPM employs about 6,100 and generated 2004 sales of 1.25 billion euros ($1.52 billion). Its machinery brand names include Krauss-Maffei, Demag Plastics Group, Netstal, Berstorff and Billion.
KKR declined to comment on the newspaper report, a spokeswoman said.
MPM spokesman JÃ¶rg Hettmann said: ``We have the policy that we do not comment on the strategy of KKR. We can't say anything about this story.''
Plastics machinery observers in Germany have speculated that KKR, after three years of ownership, would take some action this year, as the equipment sector rebounds - either by selling MPM or taking it public.
An equipment rebound is evident in some of the financial numbers released by MPM units. Krauss-Maffei Kunststofftechnik GmbH of Munich, MPM's largest unit, reported record sales in 2004 of 535 million euros ($651 million). Netstal-Maschinen AG of NÃ¤fels, Switzerland, reported double-digit gains in sales and profit.
The Times reported that, although MPM is not officially for sale yet, KKR has picked Goldman Sachs to handle an auction of the machinery giant. The Times estimated the price would be 700 million euros ($912 million).
The London newspaper said several buyout firms have expressed interest in MPM, including Texas Pacific Group of San Francisco and New York-based AEA Investors.
In 2002, KKR paid Siemens AG $1.7 billion for seven businesses, the largest of which was Mannesmann Plastics Machinery. KKR never has disclosed how much it paid for MPM.
Some German machinery officials thought MPM was leaning toward an initial public offering, not a sale to a financial buyer.
Under KKR ownership, MPM leaders continued to pursue the group's ``multibrand strategy,'' keeping the machinery brands separate but sharing some resources. That could change if a new financial buyer decides the value of MPM units - broken up and sold off - is worth more than the unified machinery group.
MPM - and its parts - have generated interest from other buyers in the past.
In 2001, Swiss billionaire Christoph Blocher was ready to buy Netstal, and Cincinnati-based plastics machinery maker Milacron Inc. expressed interest in part of MPM in 2002. Milacron had no comment for this story.
Meinerzhagen, Germany-based SMS Plastics Technology also has expressed interest. SMS owner Heinrich Weiss even disclosed last year that plans for a merger between SMS and MPM had been canceled.
Commenting on the new story in The Times, an SMS spokeswoman said the company now has no interest in MPM.