Buyout firm Cognetas is preparing to auction Capital Safety, a maker of safety harnesses, for up to $350m (£185m).
Cognetas is understood to have hired Close Brothers to sell the business. Private equity giants Advent International and Permira are thought to be among those likely to bid.
It is unclear whether the firm has sent out offer documents, but investment banks have already begun circulating financing offers to potential suitors.
"Secondaries [sell-offs by private equity owners] are generally of a pretty good quality, so there will be interest in this one. It's a good business," said a source. Cognetas, the London-based private equity firm formerly known as Electra Partners, and Close Brothers were not available for comment.
Capital Safety, based in the US, makes the harnesses used by workers on tall structures. It derives 50 per cent of its revenues from the US, and the rest from Europe and Asia. That could limit the number of European private equity bidders, sources said, because some have investment agreements allowing them to buy companies only where the majority of the business is derived from Europe.
Capital Safety fits the profile of industrial firms owned by Advent. "It's definitely one for them," said a banker with links to the company. Permira, Europe's largest buyout firm, bought Aearo Technologies, a US maker of earplugs and safety equipment, in February for $765m. It could integrate Capital Safety with Aearo.
Cognetas's investment in Capital Safety dates to 1998, when it bought BTP's safety equipment division. If it manages to sell, it is expected to make a healthy re- turn on the original investment.
Close Brothers led a $184m debt refinancing of the business earlier this year, which included a dividend to shareholders.
The sale is part of a wider off-loading of assets by Cognetas. It pocketed €390m (£260m) last month when it sold BWG, an Irish convenience-store operator.Reuse content