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PE bigwigs advance in $1b-plus Owens-Illinois auction

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Up for grabs is US-based Owens-Illinois’ Australian and New Zealand business which makes beer bottles for Lion, Asahi, Heineken and others, and recorded $750 million in revenue last year and $140 million in earnings before interest, tax, depreciation and amortisation.

It is likely to sell for more than $1 billion.

PEP, Carlyle, Bain and Blackstone are expected to represent about half of the auction while Anthony Pratt’s Visy Industries is understood to be among the trade players in the process. You would have to think Owens-Illinois and Goldman Sachs would’ve gone with a relatively long shortlist for the second stage, given it was to be followed by another round next year.

Street Talk has ruled out a handful of other private equity contenders including KKR, BGH Capital and TPG Capital.

The shortlisted group is expected to spend the coming fortnight meeting Owens-Ilinois management and working through diligence materials. Sources said it was too early for bidders to get investment banks involved – underwritten funding is not required at this stage in the process.

It would be a big bite for either Blackstone, Bain, PEP or Carlyle. While all four have the firepower for $1 billion-plus deals, it is not something we have seen from any of their Australian teams in the past few years. Perhaps the exception is PEP and Carlyle, which teamed up for $1.23 billion joint buyout of iNova Pharmaceuticals nearly two years ago. It remains to be seen whether they’ll consider working together again.

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