By Soyoung Kim, Greg Roumeliotis and Olivia Oran
NEW YORK (Reuters) - Michael Foods Group Inc, a producer and distributor of egg and dairy products owned by Goldman Sachs Group Inc's
Michael Foods has asked Goldman Sachs' investment banking unit and Bank of America Merrill Lynch
The company could attract interest from food companies as well as private equity firms, said the people, who asked not to be named because the matter is not public.
Michael Foods and Goldman Sachs did not immediately respond to requests for comment, while Bank of America Merrill Lynch declined to comment.
Minnetonka, Minnesota-based Michael Foods produces and distributes various products to the retail, food service and ingredient markets, including specialty egg products, refrigerated potato products, cheese and other dairy products.
Its egg product brands include Papetti's, Abbotsford Farms, All Whites and Better'n Eggs. Michael Foods also owns the Simply Potatoes line of refrigerated potato products, as well as Crystal Farms branded cheese and refrigerated products, according to its website.
Goldman Sachs Capital Partners bought Michael Foods from private equity firm Thomas H. Lee Partners LP in 2010 for around $1.7 billion. Thomas H. Lee retained an ownership stake of about 20 percent as part of the transaction.
In the nine months ending September 28, Michael Foods posted adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $188 million, up 7.2 percent from the same period last year.
For the full year, the company is on track to report EBITDA of close to $250 million. Michael Foods is hoping to fetch roughly 9 times that amount, two of the people said.
Goldman Sachs has changed the way it invests in private equity since it bought Michael Foods to comply with the so-called Volcker rule, which limits investment bank investments in illiquid asset classes.
In a bid to pool money for deals without raising a private equity fund, the Wall Street bank has been underwriting the equity in deals and then lining up clients willing to put money into accounts set up to invest in them, people familiar with the matter said earlier this year.
(Reporting by Soyoung Kim, Greg Roumeliotis and Olivia Oran in New York. Editing by Andre Grenon)