EQT declined to comment on the return multiple, but Morten Hummelmose, a partner at EQT, told Private Equity International the firm is “very satisfied with the return”.
EQT, which typically invests in companies between €100 million and €500 million, bought KMD in 2009. KMD is a software provider to local governments in Denmark, the Danish state and private companies. In 2011, it had an EBITDA of DKK 577 million (€77 million; $100 million). The company has annual revenues of DKK 4 billion and employs approximately 3,400 people.
EQT said its 3.5 year ownership the business improved its efficiency and developed new software solutions. KMD also built a platform for further growth in the Swedish market.
The deal is subject to regulatory approval and is expected to be completed by the end of the year.
Advent was unavailable to comment before press time. Market sources told Private Equity International debt for the transaction was provided by institutions including Danske, Natixis, GE, Mizuho and BNP Paribas. Advent was advised on the transaction by Credit Suisse, Deloitte, Marlborough Partners, McKinsey & Company, and Weil, Gothal & Manges.
The Boston-based firm plans to further internationalise the business, the statement said. “We believe that KMD has world-class solutions and that the company has strong potential to grow internationally,” John Woyton, director of Advent International, said in the statement.
Major focus will be placed on increased presence in the domestic and international markets as well as the rapid innovative integration of cross-channel sales concepts.
It joined forces with the Kreke family in a bid to delist the company, offering €38 per share. The company has a market cap of €1.48 billion. The shares were trading at €37.62 at 16.00 GMT. At Friday’s close Douglas’ share price stood at €34.80. The acceptance of 50.5 percent of the share capital has been secured, Advent said in the statement. The minimum acceptance threshold is 75 percent.
The Douglas Group has five retail divisions, which includes the Douglas perfumeries and Thalia bookstores. It has approximately 24,000 employees, 1,900 stores and annual sales of more than €3 billion.
Although consumer spending is subdued in Europe, this is an “attractive investment”, Advent said. “Our decisions are based on thorough analyses and professional assessments of our globally active retail experts,” a spokesperson told Private Equity International. “The company stands for strong brands, outstanding quality and excellent customer service. We are convinced that the Douglas Group has great potential, and we are looking forward to promoting the strategic development together with the management and the employees.”
The main objective is to accelerate the growth of the perfume and jewelry division jointly with the management, Advent said. “Major focus will be placed on an increased presence in the domestic and international markets as well as the rapid innovative integration of cross-channel sales concepts,” the spokesperson added.