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By Arno Schuetze
FRANKFURT (Reuters) - Buyout group Cinven (CINV.UL) has mandated Rothschild to explore options including a sale or stock market listing of its German truck and trailer parts maker Jost Group, two people familiar with the deal said.
Any divestment would prove a positive turn for Cinven, which acquired a majority stake in Jost just weeks before the Lehman insolvency in 2008 and had to agree to a restructuring of Jost's finances in 2010 to avoid a looming insolvency.
After posting heavy losses at the height of the global economic crisis, Jost currently has earnings before interest, taxes, depreciation, and amortisation of roughly 75 million euros (58 million pounds), the sources said.
If valued at a similar multiple as peers - which trade at an average of 8 times their earnings - Jost may reap a valuation of about 600 million euros in a potential sale.
The process is still at an early stage and may only officially launch in several weeks or months with the outcome completely open, the sources said.
Rothschild and Cinven declined to comment, while Jost was not available for comment.
In a move to gain a more international footing ahead of any sale or stock market listing, Jost in October bought peer Mercedes-Benz TrailerAxleSystems from car maker Daimler (DE:DAIGn).
"The deal increased Jost's size and may make it more appealing for potential IPO investors," one of the sources said.
Jost, which competes with listed groups like Wabco (N:WBC), SAF Holland (DE:SFQN) and Stabilus (DE:STAB), may also appeal to rivals or to other buyout groups, the sources said.
"However, truck part makers usually have a pretty regional focus, so I do not expect a large number of strategic players to look at the asset," an industry source said.
Jost struck a deal in 2010 to restructure its finances, avoiding a looming insolvency and cutting its loan burden through a debt-for-equity swap.
Cinven saw its 77 percent stake in the company cut to 64 percent, while Jost's management retained a stake of more than 23 percent and junior debt holders converted their claims into preferred shares, giving them a 13 percent stake. The deal included a 50 million euro cash injection from Cinven and mezzanine lenders.
Jost has about 2,500 employees and is based in Neu-Isenburg, outside of Frankfurt.