UK buy-out group Cinven has agreed to purchase CPA Global, one of the world’s largest patent management groups for £950m, the FT reports, citing people close to the deal. ICG, which provides companies with debt and equity funding, asked advisers HSBC and DC Advisory Partners to start the sales process for CPA Global in December, barely two years after acquiring it. CPA has nearly doubled earnings before interest, tax, depreciation and amortisation since ICG bought the business, according to one person familiar with the situation. Its customers include large chemicals, pharmaceutical and telecoms companies, which have patents as a result of research and development work.
PAI Partners has launched an €800m-€1bn auction for Compagnie Européenne de Prévoyance, France’s biggest mortgage insurance services company, reports the FT. Several buy-out groups, including Apax Partners, Montagu, Cinven and Charterhouse, are working on potential bids for CEP, which PAI, France’s biggest private equity group, bought from the Bessé family in 2005. Rothschild is handling the sale and first-round bids are expected in February. The sale would generate a more-than fivefold return on PAI’s initial investment. PAI is also expected to receive bids of about £650m next month for Kwik-Fit, the UK car parts retailer, from US buy-out firm CDR and Japanese tyremaker Bridgestone. The French group is also selling its stake in Yoplait, the world’s second-biggest yoghurt brand.
Buy-out groups are this week set to sign a string of tertiary deals – in which the company is sold to its third private equity owner – worth more than €1.6bn ($2.1bn), highlighting the growth of such deals in Europe’s private equity market, reports the FT. The Carlyle Group has entered exclusive talks to pay €485m for B&B Hotels, a budget hotel chain in France and Germany, from Paris-listed Eurazeo, which bought the group five years ago from Duke Street Capital. Meanwhile, Bridgepoint plans to buy two of France’s biggest jewellery chains, Histoire d’Or and Marc Orian, from Silverfleet and Qualium, their third and second private equity owners, respectively. In Italy, HgCapital and Cinven are vying in a €600m auction for TeamSystem, the accounting software maker, being sold by Bain Capital six years after acquiring it from another buy-out group.
Breaking pre-market news on Tuesday,
- Ocado aiming for equity valuation of £800m-£1.1bn via IPO on the London Stock Exchange — statement. Read more
Breaking pre-market news on Tuesday,
- News Corp offers 700p a share for BSkyB; Sky’s independent directors want 800p– statement and statement. Read more
Amadeus, the global distribution system for travel reservations, has raised €1.32bn in one of Europe’s biggest initial public offerings for two years, the FT reports. The Madrid-based company was created by four airlines in 1987 and taken private by buy-out firms BC Partners and Cinven in 2005.
Istithmar, the investment arm of the troubled Dubai World conglomerate, has put Inchcape Shipping Services, the UK-based port and shipping agent, up for sale for $600m-$700m, in a deal that has drawn interest from buy-out groups including Advent International, Cinven, Charterhouse, Montagu, TPG and KKR. Istithmar bought ISS for $285m at the start of its buying spree from 2006 and is now selling assets to help Dubai World restructure its $22bn of debt.
UK buy-out house Permira and John Lovering, the veteran UK retail executive, have teamed up to prepare a bid for DFS, the sofa chain being sold by its founder Lord Kirkham. The auction of DFS, valued at about £500m, has drawn other buy-out groups including Advent International and Cinven. Any deal would hand a windfall to Lord Kirkham, who founded DFS 35 years ago and took it private again for £507m in 2004.
EQT, the private equity arm of Sweden’s Wallenberg family, is set to announce on Thursday the €2.3bn takeover of Springer Science and Business Media. The deal ends a tortuous sales process by its two UK private-equity owners, Cinven and Candover, which will receive only about €100m for their equity in the debt-laden German group. Banks, led by Goldman Sachs, Deutsche Bank, BarCap and Unicredit, will on Thursday discuss a refinancing deal, where EQT would invest about €450m of fresh capital to repay Springer debt.
Informa, publisher of Lloyd’s List, has held talks with its rival Springer Science and Business Media over buying the German academic publisher whose private equity owners are looking to sell the whole business at a reduced valuation. Springer, owned by UK buy-out groups Candover and Cinven, was initially negotiating with key private equity rivals to sell a stake of as much as 49% for about €400m. But interested parties are now considering buying the whole company for under €400m, as Springer’s impending debt maturities have forced the sellers to cut their valuation target.
British Car Auction has attracted bids from a clutch of private equity groups that are expected to submit final offers next month valuing Europe’s biggest vehicle reselling network at between £400m ($670m) and £500m. Bridgepoint, Cinven, BC Partners and Clayton Dubilier & Rice are all expected to reach the second round of bidding for BCA, which sells more than 12,000 vehicles a week at physical and internet auctions. CD&R, the US buy-out fund, may have an edge in the auction as it owns Hertz, the car rental group, which uses BCA to sell its older vehicles when it renews its fleet.
Shareholders in UK gambling group Gala Coral have agreed to cede overall control of the group under a debt restructuring proposal to be considered by the board on Friday. The breakthrough over restructuring Gala’s £2.5bn debt came last weekend after Candover, Cinven and Permira, Gala’s private equity owners, agreed with two key holders of Gala’s mezzanine debt, ICG and Park Square, that such debt holders will have equal representation on the board.
Gala Coral, Britain’s biggest bingo chain, is close to finalising a restructuring deal that will see lenders write off £540m of debt, reports the Guardian. The gambling group’s private equity owners Candover, Cinven and Permira are expected to relinquish up to half their stake in return for cancellation of loans. The Telegraph adds that Intermediate Capital Group, the mezzanine finance lender, and Park Square are leading the syndicate that will end up with up to 50% of Gala Coral.
Gala Coral, the private equity-owned UK gambling group, has accused Euler Hermes, one of the world’s largest credit insurers, of “appalling behaviour” in withdrawing cover against unpaid bills to Gala Coral’s suppliers. Drinks and packaging suppliers to the gambling group were denied cover on the grounds that insurers were worried about the future of companies backed by private equity, say people close to Permira, Candover and Cinven, Gala Coral’s owners. But people close to Euler Hermes say the withdrawal of cover was linked to Gala Coral’s debt problems and refusal to supply information.
Investors on Monday greeted news of a proposed merger between United Business Media and Informa as a credible combination of two complementary business media groups. Shares in UBM rose 2% to 618p Monday while Informa’s shares shot up 13.3% to 437½p as investors bet the nil-premium proposal may flush out a private equity offer. Providence Equity Partners is known to be examining Informa, although it has not yet made an offer. Cinven and Candover, which bought the Springer scientific publishing business in 2003, are also considering whether to renew their approach to Informa, although not at the 630p-a-share price tag offered last year. Carlyle and Apax are among other buyout groups thought to be interested.
The private equity backers of UK betting operator Gala Coral are ploughing £125m into the company in return for a relaxation of its covenants, because of investor concerns that the company was heading for default. Candover, Cinven and Permira met bankers and Gala’s management on Wednesday to agree a deal that sees about £85m of the new equity investment go into paying down debt, which amounts to £2.5bn. In return, lenders will increase headroom on the covenants at 10-15% above Gala Coral’s forecast ratios.
Cinven has acquired Coor Service Management of Sweden in a €540m deal designed to harness rapid growth for managing facilities that big companies prefer to outsource. The acquisition is a boost for 3i which has made a four-fold return on its initial investment since acquiring Coor for SKr1.2bn less than three years ago. The deal suggests that secondary buy-outs are still achievable in spite of the higher cost of debt and lower levels of leverage available from banks after the credit crunch took hold.
Four UK-based private-equity firms that became majority owners of Dakota Minnesota & Eastern Railroad Corp more than two decades ago are finally set to cash in their investment – and make at least 20 times what they paid, reports the Wall Street Journal. The firms, F&C, Candover, Electra and Cinven, which between them now own about 30% of DM&E, are selling their stakes following the sale of the company to rival Canadian Pacific Railway late Tuesday for $1.48bn, with an additional $1.06bn payable if targets are met between completion of the deal and 2025. The four became majority owners of DM&E as part of a consortium in a 1986 buyout. The FT reports that the deal expands the reach of Canada’s second-biggest railway in the US Midwest amid growing demand for rail transport.
Cinven, the European private equity group, on Monday unveiled its second private healthcare deal in less than a month, agreeing to pay €675m for USP Hospitales of Spain. The firm beat at least two other bidders for the business, which last year reported revenues of €246.7m. The vendor, Mercapital, is Spain’s biggest private equity firm, while USP is among the country’s largest independent healthcare providers.
Private equity group Cinven is poised to win the battle to acquire 26 Bupa hospitals for £1.4bn-£1.5bn in a deal that could be announced as early as Monday. Cinven’s private equity rivals – CVC, Terra Firma, PAI and BC Partners – are also understood to have submitted second round bids. Blackstone, the US private equity group, also worked on an offer with Ramsay Healthcare of Australia that advanced to the second round. The bidding was competitive but Cinven is understood to have won because, in addition to the price it offered, it had a strong medical portfolio.
Argent Energy, which makes biodiesel from animal fat and used cooking oil, is to seek an Aim listing that analysts expect will value the group at about £70m. Argent Energy is owned by Argent Group, which was the product of a 1997 management buy-out from Hillsdown Holdings, the food group. Cinven, the private equity group, holds a 56 per cent stake, which will be reduced through a placing. Hoare Govett will be nominated adviser and broker to the company and the placing. ABN Amro Rothschild will be lead manager and underwriter.
Sysco, the Texas-based food distribution company, on Thursday night emerged as a contender in the auction for Brake Bros, its UK peer which is being sold by Clayton Dubilier & Rice, the private equity group, and could fetch more than £1.2bn. According to people familiar with the matter, Sysco, one of the world’s largest food distribution companies with a market cap of nearly $20bn, will be competing for Brakes against several private equity groups, including US firms such as Bain and Blackstone, and UK firms CVC and Cinven.
Ramsay Health Care, Australia’s biggest private hospital operator, is eyeing a joint bid backed by private equity for 26 hospitals in Britain owned by BUPA, which could be worth more than £1.2bn, reports The Times. Ramsay is understood to have held preliminary talks with several potential backers, including Macquarie, the Australian investment bank. The Sydney-based group operates more than 70 hospitals and day care centres in Australia and three in Indonesia. A range of other private equity firms, including Blackstone, Cinven and CVC, are also thought to be interested in bidding for BUPA’s hospitals. Citigroup is handling the hospital sale on behalf of BUPA.
CVC, whose bid for J Sainsbury collapsed this week, is in advanced stages of forming a powerful financial consortium to trump Imperial Tobacco’s £12.3bn bid for Altadis, the Franco-Spanish tobacco company. CVC has teamed up with PAI, the French private equity group, to consider a joint bid for Altadis. Cinven is also in talks to join the consortium, according to people close to the situation. CVC, which is leading the discussions, discussed its interest with Altadis management last month. The two sides have a close connection through Carlos Colomer Casellas, an Altadis board member who is also a member of CVC’s advisory committee. The team, which is being advised by Goldman Sachs and Lazard, would need to provide at least 4bn euros of equity and has approached SocGen, Calyon, RBS and ING about debt financing for a deal.
BAT is in talks with private equity firms over a possible bid for Altadis, reports The Times. The talks are thought to be with CVC Capital, Cinven and PAI, the French buyout group, all of which are known to be interested in all or part of Altadis’s business. BAT’s move would spark a bidding war with Imperial Tobacco, which is understood to be close to raising its £9.5bn offer for the Franco-Spanish maker of Gauloises and Gitanes. The talks are at a very early stage and it is not yet certain that BAT will proceed with a bid, sources said. Any deal would likely see BAT keep the lion’s share of Altadis’s cigarette and cigar brands, but sell its separately listed distribution business.
The news comes despite comments from Paul Adams, its chief executive, that tobacco stocks, including Altadis and Imperial, are too expensive. That was why Mr Adams chose not to make a counterbid for Gallaher, BAT’s smaller UK rival, that was snapped up for £7.5bn by Japan Tobacco this year.
Several private equity groups considering bids for Altadis, the Franco-Spanish tobacco company, are working on break-up plans which they hope will give them the edge over Imperial Tobacco, whose £8bn offer for Altadis two weeks ago was rebuffed, the FT reports.
It emerged this week that at least three European private equity firms, including CVC Capital and Cinven, have expressed an interest in Altadis. The third group is PAI Partners, the pan-European buyout house, reports The Independent. Read more
At least three European private equity firms have expressed an interest in bidding for Altadis, the Franco-Spanish tobacco company that rejected an £8bn bid from Britain’s Imperial Tobacco this month. CVC Capital, the pan-European buy-out firm, is understood to have notified Altadis of its interest last week, according to people close to the situation. The two know each other through Carlos Colomer Casellas, an Altadis board member who is also a member of the advisory committee of CVC, the people said. They added that CVC had not yet made a formal offer and might not proceed with one. Cinven, a rival UK private equity group, is also thought to have registered its interest with Altadis, and a third European firm has also made separate contact.
Whitbread confirmed yesterday that it was in early talks about a possible sale of its David Lloyd Leisure business. It would not say who had approached it, but one name in the frame is Scott Lloyd, who runs Next Generation fitness clubs and is the son of the fitness chain’s founder. Several groups have been linked to an approach to Whitbread in recent months, including Cinven, CVC, UBS, the Reuben brothers, Robert Tchenguiz’s R20, Starwood Capital and Apax. The Whitbread board said it was evaluating a number of unsolicited approaches to acquire David Lloyd but made it clear no decision to sell had been made.
New Look, the high street retailer, has appointed Merrill Lynch to look at its strategic options as the privately owned retailer gets ready to put itself up for sale – with a price tag of up to £2bn. It is thought that Apax and Permira, New Look’s owners, have ruled out a flotation for the fashion chain and will instead conduct a secondary buy-out three years after taking New Look private for £699m in March 2004. Since then, Apax and Permira, which own 66 per cent of the business, have each doubled their £150m investments through two refinancings and – should New Look be sold for £2bn – could garner up to £1.3bn between them. The chain has already received expressions of interest from a number of private equity houses. Potential bidders could include KKR, CVC, Bain Capital, TPG and Cinven.