Private equity firms Blackstone and BC Partners are set to submit a joint bid for frozen food company Iglo, in a deal which is expected to value the company at $3bn, including debt.
The two firms, which were earlier competing with each other over the acquisition, are the last remaining bidders in race for Iglo, which was put up for sale by its private equity owner Permira in March 2012.
Under the proposed deal, Blackstone and BC Partners will each hold 50% of Iglo, which means that the deal amount is expected to be lower if both the firms were competing separately.
Permira expects a sale price of around €3bn, which is eight or nine times the company's forecast Ebitda of €320m this year, which will make the deal one of the biggest private equity transactions of 2012.
According to media reports, some banks are unwilling to provide loans for the Iglo deal due to present credit market environment in Europe, and the offer from Blackstone and BC Partners may not meet Permira's expectations.
If Permira does not receive the expected offer, it may abandon the sale itself.
Permira hired Swiss banking firm Credit Suisse to handle the auction of Iglo after it received unsolicited expressions of interest from several companies.
In the auction process, companies such as Bain Capital and Clayton, Dubilier & Rice were not able to clear the first round of bidding.
Permira acquired the Iglo and Birds Eye brands from Unilever in 2006 and combined them to form Birds Eye Iglo, which was later renamed to Iglo.
In 2010, Permira expanded Iglo's operations further by acquiring the Findus brand in Italy from Unilever.
Iglo, based in UK, manufactures pea, poultry and potato waffle products and has food production sites in Remerhaven and Reken in Germany, Lowestoft in the UK and Cisterna in Italy.
