Australian private equity fund Pacific Equity Partners (PEP) has approached potential buyers for its share-registry business Link Group, kickstarting an auction that could value the company at as much as A$1.4 billion ($1.4 billion) including debt, sources said.
A successful deal will make it Asia's biggest private equity stake sale so far this year and may spur more buyout shops to cash in on their investments.
Interested bidders for the asset include global private equity firms Bain Capital, Blackstone Group L.P., Carlyle Group, U.S.-based Hellman & Friedman and KKR & Co L.P. , the sources, who had direct knowledge of the matter, said.
PEP has hired Goldman Sachs to advise on the sale of Link, which has been anticipated since 2011, the sources said. PEP acquired Link in 2005. Private equity firms usually exit their investments in a five- to seven-year timeframe.
No deadline has been set for first-round bids on the assets and Goldman is expected to give access to a 'data room' to some interested parties, one of the sources said.
Link, which comprises Link Market Services, competes with Australian share registry company Computershare and pension administrator AAS. It has been looking to raise capital to fund global expansion.
PEP plans to retain a small minority stake in the company, while selling majority control, the sources added. Link's latest annual earnings before interest, tax, depreciation and amortisation are estimated to be between $120-130 million, two of the sources said.
PEP declined to comment. Goldman was not available for an immediate comment. The sources did not want to be identified as they were not authorised to speak to the media.
Britain's Equiniti, owned by private equity firm Advent International, has also shown interest in bidding, one of the sources said. With over 60 percent of the FTSE 100 as clients, Equiniti is Britain's leading share registrar, according to information on its website.
Blackstone, Carlyle, Hellman & Friedman and KKR declined to comment.
Bain and Equiniti could not be reached for an immediate comment.
Link Group has expanded its global reach with a string of acquisitions, which totalled over 20 deals since 2005. Link Market Services manages over 10 million accounts in Australasia.
With few sizeable assets coming on the block for auction this year, there should be no shortage offinance for private equity bidders, who back their bids with borrowed funds to increase profits.
This article is copyrighted by Reuters
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