At least five private equity firms are expected to submit indicative bids upwards of $2.1 billion for a majority stake in Rexel SA, the largest electrical distributor in the world, according to a recent Reuters article.
A Sept. 27 Reuters report said Rexel’s Paris-based parent, French retailer Pinault-Printemps-Redoute SA (PPR), wants to divest its 74 percent Rexel stake by year-end to focus on luxury goods and distribution. PPR owns high-fashion brands such as Gucci, Yves Saint Laurent, Sergio Rossi, Boucheron and Bottega Veneta. In 2003, PPR posted 2003 sales of $29.9 billion. The company has more than 100,000 employees in at least 65 countries.
The report said as of June 30 Rexel had a market capitalization of approximately $2.8 billion, and net debt of approximately $1.4 billion. According to French stock market regulations, once the successful bidder has agreed to a deal with PPR, it would then have to make an offer to buy the remaining shares at the same price.
The sale is being run by Rothschild and Cie, Paris, although PPR is also considering an initial public offering for its stake, according to the Reuters report. Rothschild had given potential bidders a deadline of Oct. 4 for indicative offers, said the report.
The list of investment bankers reportedly interested in Rexel reads like a “Who’s Who” of the investment banking community. London buyout firm CVC Capital Partners is planning to submit its bid as part of a consortium including fellow U.K. private equity group Cinven Group Ltd., London; and U.S. firm Bain Capital LLC, Boston, the report said. London-based private-equity firm Permira has agreed to partner with The Blackstone Group, Chicago, while B.C. Partners, New York, is teaming up to bid with PAI, the report said. Carlyle, Washington, D.C.; and Clayton Dubilier and Rice, New York, are also planning to submit offers, sources told Reuters.
Rexel has 280 locations and 4,400 employees in the United States, and had 2003 annual U.S. sales of $1.9 billion, according to Electrical Wholesaling magazine’s 2004 Top 200 listing. Rexel SA has 1,700 branches and 21,300 employees in 29 countries and approximately $8.2 billion in 2003 annual sales. Sonepar, Paris, is the second largest distributor in the world, with $7 billion in sales, 1,146 branches and 19,700 employees.