Schenck Process owner Blackstone launches sale process

Ryan Gould , Joao Grando and Maryna Irkliyenko
14 October 2021

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Blackstone has kicked off the sale of German measurement technology group Schenck Process, sources familiar with the matter said, potentially generating as much as EUR 1.5bn in proceeds.

The US buyout group distributed information memorandums via sell-side adviser Goldman Sachs in recent weeks after engaging in a series of fireside chats with mostly financial buyers, according to the sources.

Indications of interest for Schenck, which manufacturers equipment used to weigh and dose substances, are due shortly, one of the sources added.

While there are no formal plans for a piecemeal sale, prospective buyers are expected to hone in on the break-up potential for the Germany-based business in their initial proposals, two of the sources said.

Private equity firms see value in Schenck's food technology equipment following a series of bolt-ons in the vertical under Blackstone's ownership – including the acquisition of UK-based Baker Perkins – one of the sources said.

Meanwhile, the group's mining arm, which makes heavy-duty screening equipment of materials such as coal and gold, has drawn the interest of FTSE 250 engineering firm Weir, two of the sources said. Schenck chief executive Keith Cochrane, who assumed the role in March 2019, was CEO of Scotland-based Weir until 2016.

Potential suitors of Schenck include financial sponsors PAI Partners and Lone Star, as well as diversified industrial group Hillenbrand, one of the sources said. Another noted that "experienced" industrial investors like Onex Corp, CVC and Koch Industries could also express interest.

The company provides control solutions across four other verticals, including energy, infrastructure, chemicals and performance materials.

Any deal could see the firm valued at between 8x and 12x core earnings, three of the sources said. While Schenck reported adjusted EBITDA of EUR 91.4m (USD 106m) on sales of EUR 592m (USD 686m) for 2020, the vendor is pointing buyers towards forecasted 2022 earnings that are expected to show more meaningful margins, one of them added.

A representative for Blackstone declined to comment. Schenck, Goldman Sachs and Weir did not respond to requests for comment.