Exclusive - Japan's Toshiba prepares $2 billion sale of Landis+Gyr - sources
By Christoph Steitz, Arno Schuetze and Oliver Hirt FRANKFURT/BERLIN/ZURICH (Reuters) - Japan's Toshiba Corp <6502.T> is preparing a potential $2 billion divestment of smart meter group Landis+Gyr, hoping to rake in capital after a major writedown on its U.S. nuclear unit last month, three people familiar with the matter said. The group has hired UBS to explore a potential sale or initial public offering of the Swiss-based business, which could take place as early as after the European summer, they added. A spokeswomen for Toshiba in Europe declined to comment. UBS also declined to comment. Smart meter makers have seen a wave of M&A activity, with three major manufacturers up for sale in Germany alone, highlighting their significance as the energy industry goes digital and depends on live consumption data to a much greater extent. [nL5N1FK4R4] Landis+Gyr, in which Toshiba owns a 60 percent stake, employs more than 5,700 staff and is active in over 30 countries. It said last week that sales would grow by nearly 5 percent to $1.64 billion in the fiscal year ending this month, adding it was "unaffected by Toshiba's challenges". [nL4N1FZ19H] Toshiba announced a $6.3 billion writedown on its U.S. nuclear business last month, wiping out its shareholder equity and causing it to seek divestments to create a buffer for any fresh financial problems. [nL4N1G608J] It is expected to approach buyout groups including CVC, Cinven [CINV.UL], Advent, KKR , Blackstone , Onex and Clayton, Dubilier & Rice as potential buyers of Landis+Gyr, one of the sources said, adding that industrial conglomerates were not expected to enter the fray. Toshiba bought Landis+Gyr in 2011 for $2.3 billion jointly with state-backed Innovation Network Corporation of Japan (INCJ), which holds the remaining 40 percent in the company. The deal would value Landis+Gyr at 10-11 times its annual core earnings (EBITDA), two of the people said, in line with the 10.7 times that U.S. water technology company Xylem paid for Sensus USA Inc last year. [nL1N1AW09M] Toshiba will try to position Landis+Gyr as a Swiss industrial group, hoping to reach EBITDA multiples similar to those of Geberit , Sulzer or Belimo , which trade at between 12-19 times. ($1 = 0.9506 euros) (Editing by Susan Fenton)
