By Soyoung Kim and Greg Roumeliotis
NEW YORK, July 26 (Reuters) - TPG Capital LP, Warburg PincusLLC, Ares Management LLC and Berkshire Partners LLC arecompeting for building products maker CPG International Inc,whose sale could fetch as much as $1.5 billion, according tofour people familiar with the matter.
The private equity firms are through to the second round ofbidding and are preparing to submit offers by the middle ofAugust, the people said this week, asking not to be namedbecause the matter is not public.
CPG is itself owned by a private equity firm, AEA InvestorsLP. It has hired Barclays and Deutsche Bank to find a buyer for the company, which makes building suppliesfor residential and commercial markets such as outdoor deckingand porch boards, Reuters reported in May.
CPG International, Warburg Pincus, TPG, Berkshire Partnersand Ares declined to comment. AEA did not respond to a requestfor comment.
Headquartered in Scranton, Pennsylvania, CPG Internationalmakes synthetic construction and building products to replacewood, metal and other materials, according to its website.
CPG filed for an initial public offering in 2011 but neverwent ahead with it. An outright sale to another private equityfirm may now look more appealing to AEA given the recentconcerns of stock market investors over the state of the homebuilding market.
Fears that the residential construction sector may beoverheating led to home builder WCI Communities Inc sellingfewer shares than planned and pricing its $102 million IPO atthe bottom of its guided range this week.
Shares of home builder Taylor Morrison Home Corp,which TPG and Oaktree Capital Group LLC took public inApril, traded as low as its IPO price for the first time onThursday, ending trading down 7 percent on such fears.
AEA acquired CPG International in 2005 from private equityfirms Whitney & Co and Clearview Capital LLC for $380 million,according to a 2006 bond sale regulatory filing. AEA put in $149million as equity for the deal, the filing shows.
Last year, CPG bought TimberTech, a U.S. manufacturer oflow-maintenance decking, railing and fencing, for $320 millionfrom the Crane Group.
Standard & Poor's Ratings Services Inc projected at the timethe deal would boost CPG's revenues by more than one third toabout $530 million in 2013, with earnings before interest, tax,depreciation and amortization at about $100 million.
Were Berkshire Partners to prevail in the auction, it wouldbe the second company in the housing sector it would buy fromAEA this year. In February it acquired a majority interest inSRS Distribution Inc, the fourth largest residential roofingdistributor in the United States, from AEA for an undisclosedsum.
Barclays (BARC)