The US-based sponsor is working with Evercore on the potential CV for the German manufacturer of pure-play power transformers, said two of the sources.

The pivot to a CV comes after OEP initially pursued a sale with JP Morgan acting as its advisor, as reported by this news service in February. The process reached the second round of bidding but an exit did not materialise after offers failed to reach the sellside’s expectations, as reported.

SGB-SMIT was acquired by OEP in 2017 via its 2016-vintage Fund VI, which closed on USD 1.65bn in commitments that year.

The company is expected to report EUR 300m EBITDA in FY25, as reported.

Europe has seen several large CVs come to market this year. In October, PAI Partners closed a EUR 3.6bn CV for ice cream maker Froneri in a deal anchored by Goldman Sachs. More recently, CapVest wrapped up a USD 7bn transaction for Curium in a deal led by Intermediate Capital Group, TPG and CVC. Both of these deals were so-called CV-squared transactions for existing continuation vehicles.

Refinancing

The sponsor has in recent months also been working on a dividend recap for SGB-SMIT, but the process has been delayed, according to a fourth and fifth sources familiar.

OEP was hoping to structure the refinancing off leverage of around 3x-3.5x EBITDA, implying a debt quantum of EUR 900m-EUR 1.05bn based on the company’s projected FY25 EBITDA of EUR 300m, as previously reported.

Two years ago, a restructuring plan put forward by SGB-SMIT was sanctioned by a High Court judge in London after the company sought to extend maturities on various debt instruments by 45 months and bring in around EUR 70m of fresh funds in a bid to avoid falling into insolvency.

Headquartered in Regensburg, SGB-SMIT is a leading manufacturer of transformers and power transformer products such as large and medium power transformers, dry transformers, distributor transformers and associated services, according to One Equity’s website. Its power transformer products are used by utilities, grid operators, renewable energy OEMs and industrial clients.

OEP declined to comment. Evercore did not respond to requests for comment.