FILE PHOTO: The ticker and trading information for Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid

FRANKFURT (Reuters) - Buyout group Blackstone BX.N and Danish family investor Kirkbi are launching the sale of German insulation foam maker Armacell in a potential 1.3-1.5 billion euro ($1.43-$1.65 billion) deal, people close to the matter said.

Rothschild has been brought in to handle the deal, the people said.

Blackstone and Kirkbi, the owner of the Lego toy brand, declined to comment, as did Rothschild.

The investors had bought the company from private equity firm Charterhouse in 2015 for 960 million euros.

Based in Muenster, Germany, Armacell operates 25 manufacturing facilities around the world and employs 3,000 staff. It specialises in flexible insulation foams used to lag pipes and ductwork in buildings.

Armacell is expected to post earnings before interest, tax, depreciation and amortisation of 130 million euros this year and could be valued at 10-12 times that, the sources said.

Listed peers Rockwool ROCKb.CO and Kingspan KSP.I trade at 6.4 and 15 times their expected core earnings, respectively.

Armacell was founded in 2000 as part of a buyout of the insulation activities of U.S.-based floorings maker Armstrong World Industries AWI.N by investors Gilde und CVC. It was sold to buyout firm Investcorp before Charterhouse acquired it in 2013.

Since the takeover by Blackstone and Kirkbi, Armacell has made five acquisitions of its own. In 2018, the company posted an EBITDA of 106 million euros on sales of 610 million.