Plans for a float of Arrium’s Moly-Cop grinding media business are officially underway, with the company valued by analysts at between $1 billion and $1.5bn.
The Australian can reveal that on an enterprise value, Moly-Cop is worth between $1.3bn and $1.9bn, the analysts estimate.
Deutsche Bank valued the company at between $US1.03bn and $US1.223bn, equating to between seven and nine times its earnings before interest, tax, depreciation and amortisation. Macquarie valued Moly-Cop at between $US1.24bn and $US1.3bn, or between eight and 9.5 times EBITDA, while UBS’s estimate was between $US1bn and $US1.2bn, equal to 6.7 times to 8.3 times EBITDA.
Moly-Cop is subject to a dual track process and working on the prospective float is UBS, Macquarie and Deutsche.
Today’s release of the research will kick off the start of the analyst marketing campaign for the company, which will last a fortnight.
An operation that manufactures steel balls used for mining, Moly-Cop has widely been viewed as the more lucrative part of the Arrium operation, which collapsed into voluntary administration with debts worth more than $2bn earlier this year.
KordaMentha is now working with Arrium, co-ordinating a break up of the business during which its iron ore and steel manufacturing operations will be divested separately through Deutsche and Morgan Stanley.
Moly-Cop is also understood to be keenly sought after by buyers, with Blackstone, Bain Capital, Apollo and Platinum private equity firms all eager acquirers.
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