FRANKFURT (Reuters) – Private equity groups including Cinven and Blackstone are vying to buy KKR-owned <KKR.N> LGC Group in a deal that could value the British scientific measurement and testing company at as much as £2.5 billion, people close to the matter said.
Cinven, which is working with Abu Dhabi Investment Authority (ADIA), made it to the second round of bidding alongside rival offers from Blackstone <BX.N> and Advent, they said.
U.S. private equity firm Leonard Green is also in the running for the company, which is expected to fetch £2-2.5 billion including debt, one of the people said.
The private equity groups declined to comment or were not immediately available for comment.
LGC, formerly the Laboratory of the Government Chemist, specialises in testing materials for the pharmaceuticals, agricultural biotechnology, diagnostics and food industries as well as for the government and academia.
Tests it offers includes those to determine the quality of beer brewers’ malt, check if milk powder contains salmonella, or find traces of drugs in hair samples.
JP Morgan is organising the auction, the people said.
JP Morgan, HSBC and KKR Capital Markets are expected to provide a staple financing of 7.5-7.75 times LGC’s approximate EBITDA of £165-170 million, to back a possible sale to one of the private equity groups, IFR reported last month.
KKR bought LGC from Bridgepoint in 2015 for about £650 million and has since helped the company grow through a string of acquisitions. Among others, LGC bought Toronto Research Chemicals in August and SeraCare Life Sciences in December.
LGC traces its roots to a laboratory set up by Britain’s Department of Excise to check whether substances had been added to tobacco to increase profits and evade duties. The testing company was privatised in 1996 and has seen several ownership changes since.
(Reporting by Arno Schuetze, editing by Deepa Babington)