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Osram Gets $3.8 Billion Buyout Offer From Bain, Carlyle

Bain, Carlyle Near $3.8 Billion Buyout of Germany’s Osram

(Bloomberg) -- Bain Capital and Carlyle Group LP have made a 3.4 billion euro ($3.8 billion) bid to acquire German lighting firm Osram Licht AG, concluding months of negotiations for the long-sought deal.

Osram stock rose as much as 5.1% to 33.90 euros on Thursday after the former Siemens AG spinoff confirmed it has received a binding offer of 35 euros a share and will decide “shortly” whether to accept it. The company’s supervisory board is scheduled to meet later to vote on the agreement, according to a person with knowledge of the matter.

Representatives from Carlyle and Bain declined to comment.

A deal would mark the end of Munich-based Osram’s relatively brief and at times contentious period as a standalone company. Siemens spun off what was a light bulb-making division in 2013 after which Osram Chief Executive Officer Olaf Berlien began to refocus on higher technology, sparking a bitter and public dispute over strategy. Bain and Carlyle’s purchase of Osram would also add to the $51.6 billion in private equity buyouts of European companies announced this year, according to data compiled by Bloomberg.

What Bloomberg Intelligence Says

“A 35 euro-a-share bid implies an enterprise value of 3.9 billion euros and a 12-month forward EV/Ebitda multiple of 7.7x, based on our scenario analysis. This is slightly above the 7.5x average for the BI global lighting peer group and seems fair, given Osram’s dim profit outlook and high exposure to the beleaguered automotive end-market.”

-- Jawahar Hingorani, European industrials analyst

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Negotiations to buy Osram have moved slowly since they were first revealed in February. Funding has been a challenge as potential lenders raised concerns about future earnings forecasts for the company after Osram issued a string of profit warnings.

Osram Gets $3.8 Billion Buyout Offer From Bain, Carlyle

That led the banks to reconsider the terms they were willing to offer on an acquisition loan, said people familiar with the matter, who asked not to be identified discussing the details.

Osram in March announced its sixth profit warning in just over a year as orders slowed for its lights and components, which are used in cars and smartphones. The company said in May the general economic slowdown is hurting its business.

Read more: Osram Stands by Outlook as Takeover Talks Continue

The German company has struggled since it was spun off from Siemens. Berlien shifted Osram’s focus to high-tech specialized lighting and LED chips, although he’s failed to get a handle on weakening market demand as European car sales drop. He has also tried to branch out into new areas to attract revenue such as through the purchase of horticultural lighting maker Fluence.

To contact the reporters on this story: Sarah Syed in Berlin at ssyed35@bloomberg.net;Eyk Henning in Frankfurt at ehenning1@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, ;Ben Scent at bscent@bloomberg.net, Tara Patel

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