THE OWNER of Irish cleaning products manufacturer Punch Industries is for sale with a €700 million price tag.
Axa Private Equity, French insurer Axa's buyout division, is seeking buyers for Spotless, the specialised group of cleaning and related product manufacturers that it has built up over the last three years.
Axa has invited a number of venture capital and private equity firms to bid for Spotless, which it intends selling at 10-times operating profits , or around €700 million, according to reports yesterday.
Spotless owns Cork-based Punch Industries, which produces shoe polish and household cleaners.
The group bought Punch in December 2006, but would not say how much it paid for the business. Accounts lodged by Paris-based Spotless for the year ended December 31st, 2007, value the Irish business at €50.7 million.
Punch Holdings re-registered as an unlimited company a year before its sale. At the time, it was reported to have annual sales in the region of €30 million. The Irish company has facilities in Cork, Scotland, England and Scandinavia.
While the Punch family ended its involvement in the business, it kept ownership of its properties. Chief executive, Gerry Lawlor, who played a key role in the Axa deal, remained as chief executive.
Abigail Punch founded the business in Cork in 1855. Her descendants John and Martin Punch represented the family on the board before the sale.
Spotless owns manufacturers of branded household cleaning products with established positions in their respective markets. Its other brands include Vim and Vigor.
The group had its genesis in Axa's purchase of Eau Écarlate, a French fabric care brand, from Natexis and Barclays Private Equity in 2005 for €150 million.
It followed this with Punch Industries, the household products unit of Guaber in Italy (with which Punch has a distribution agreement), Dylon International in Britain and Eparcyl in France.
Sales last year were €270 million. It employs over 350 people, 100 of them in Ireland.
Spotless is set to continue on the acquisition trail, according to Bloomberg new agency, which reported that it intends buying further businesses in the sector between now and 2010.
Axa Private Equity has hired Lazards to advise on the deal and has begun canvassing 20 private equity firms for initial bids by the end of this week.
A leveraged buyout, that is, a deal backed largely by bank debt, is said to be Axa's preferred option. Leveraged buyout activity is down this year, largely because of the credit crunch. However, banks are said to be still willing to finance deals where they believe the assets or businesses involved are attractive.
