ABN Amro Capital, the private equity unit of Dutch bank ABN Amro, has sold its UK-based healthcare business Accantia to Duke Street Capital, the UK-based buyout firm.
Duke Street, investing from its DSC V fund, has agreed to pay £225m for the business, backed by debt facilities arranged by Bank of Scotland Corporate Banking. The firm has backed a management team led by Geoff Percy, CEO, and Peter Hatherly, finance director.
ABN Amro acquired Accantia, Smith & Nephew’s feminine hygiene and toiletries business, in mid-1999 – the first significant transaction executed by the firm’s LBO team. The original buyout was financed by £56m of equity provided by ABN AMRO Capital and the management, and £115m of senior and mezzanine loan facilities, arranged and underwritten by Fuji Bank and the Royal Bank of Scotland.
Accantia owns Lil-lets, the UK tampon brand and Simple, the UK range of skin care and toiletry products. The business, based in Birmingham, has grown since its management buyout from Smith & Nephew in June 2000 and achieved sales in the year to 31 December 2002 of £96m.
The deal came about after Duke Street Capital approached ABN Amro with an unsolicited bid for the business. “We had not embarked on a sale process and were currently in the process of re-leveraging the business,” said ABN Amro director Ian Taylor.
ABN Amro Capital has not disclosed details of the return on investment although a source close to the firm said the sale would generate a return of more than 30 per cent IRR.
“Duke Street Capital believes that with the commitment of our financial and operational support, Accantia, led by one of the most experienced management teams in the sector, will achieve significant growth and a good return on our investment,” said Tim Lebus, director of Duke Street Capital, in a statement.
Duke Street was advised on the transaction by McQueen. NM Rothschild acted as advisor to ABN Amro Capital.
The deal is the first large disposal for ABN Amro since the buyout business was set up. “We are close to completing a further buyout and on the whole we remain a net buyer of assets,” Taylor commented. Last month, the firm paid E555m to acquire garden equipment manufacturer Global Garden Products, in a secondary buyout from UBS Capital.