Madison Dearborn seals $915m take-private

The Chicago-based private equity firm – reportedly close to closing Fund VI – will pay $485m in cash for BWAY, an NYSE-listed plastic container manufacturer.

Madison Dearborn Partners has agreed its first deal of 2010 with the $915 million take-private of BWAY.

The New York Stock Exchange-listed plastic container maker, which operates 20 plants in North America, has a 30-day period to solicit alternative offers. A statement from BWAY did not disclose if the Madison Dearborn agreement includes a break-up free provision or MAC clauses.

Madison Dearborn was not immediately available for comment.

The purchase price includes $485 million in cash plus the assumption of debt. BWAY shareholders will receive $20 per common share, equivalent to a 25 percent premium over the stock’s 30-day average closing price. Bank of America Merrill Lynch and Deutsche Bank will provide debt financing.

The investment would be the third made from the firm’s sixth fund, which is still fundraising and initially went to market in 2007 with a $10 billion target. As fundraising and general market conditions worsened, like many firms, Madison Dearborn revised the fund’s target to $7.5 billion.

In January, the firm reportedly asked LPs for a fundraising extension, as Fund VI was originally slated to close in February, according to a Wall Street Journal report. The report, published in January, said the fund’s committed capital had been “hovering at around $4 billion raised since mid-2008”. The fund is expected to hold a final close next month, according to a report in PE Week.

Madison Dearborn’s fifth fund closed on $6.5 billion in 2006.