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By Arno Schuetze and Alexander Hübner
FRANKFURT, Dec 15 (Reuters) - Family-owned German car partsmaker Eberspaecher has attracted interest from private equitygroups and industry players for its exhaust business in a dealthat may value the unit at more than 1 billion euros ($1.1billion), people familiar with the matter said.
Eberspaecher is set to receive bids for a majority stake inthe business next week, one of the sources said, while it willhold on to its heating and air conditioning business.
Buyout groups such as Triton, PAI Partners, KPS and 3i are expected to hand in offers for the unit, they added.
Exhaust specialists like U.S.-based Tenneco andFrance's Faurecia are also looking at the issue butthe two companies are unlikely to submit bids, they said.
Tenneco could find it hard to increase its market share inthe exhaust business segment due to antitrust scrutiny whileFaurecia would mainly consider a break-up deal for part of theEberspaecher exhaust business, one of the sources said.
Eberspaecher, Germany's 10th biggest car parts maker, supplies parts to Daimler, BMW andVolkswagen and is benefiting from the latter'semmissions scandal as demand for state-of-the-art exhausttechnology has increased of late.
Spokesmen at Eberspaecher, Tenneco and Triton declined tocomment. Faurecia, KPS, PAI Partners and 3i were not immediatelyavailable for comment.
Based in Esslingen in southern Germany, Eberspaecher'sexhaust unit could be valued at between 900 million euros and1.2 billion euros, a multiple of between five and seven timesits expected earnings before interest, taxes, depreciation, andamortisation (EBITDA) of 180 million euros in 2015.
The company had core earnings of 130 million euros lastyear.
Its peers trade at a multiple of about five times theirexpected core earnings, a level that potential buyers arewilling to offer, while the family owners are hoping for avaluation of up to seven times, the people said.
In the aftermath of the global financial crisis,Eberspaecher's sales slumped 40 percent in 2009. But it hasrebounded although ongoing expenses to restructure, inparticular the Exhaust Technology division, have weighed onprofit.
Eberspaecher, which has 8,400 employees and in its fiscal2014 generated 3.6 billion euros in sales, has cut jobs inSweden and Germany to offset a slump in demand in Europe. It hasalso overhauled its commercial vehicle exhaust business to helptruckmakers meet the mandatory Euro 6 emissions standard. ($1 = 0.9092 euros) (Additional reporting By Pamela Barbaglia; Editing by KeithWeir)
