Alchemy spends €180m on CVC, Bridgepoint asset

CVC Capital and Brigdepoint have sold Bladgen, the UK packaging group acquired for €149m in 1998, reporting a ‘healthy’ return on their investment.

Alchemy Partners, the UK private equity firm headed by Jon Moulton, has acquired Blagden Packaging Group, the UK-based manufacturer of industrial packaging.

 

The price for the business has not been disclosed, although sources close to the deal indicated that Alchemy agreed to pay €180 million ($140 million) for the business.

 

The transaction, which is subject to anti-trust regulatory clearance, provides Bridgepoint and CVC Capital Partners with a full exit, with both firms reporting a healthy return on their initial investment. Sources said Bridgepoint doubled its money on the business acquired by the two firms for €149 million in 1998.

 

Bridgepoint and CVC Capital Partners supported a buy and build strategy at Blagden that has strengthened the company’s position in the European new and reconditioned drum manufacturing sector. As a result, the business now has 19 facilities in eight European countries, including the recent launch of operations in Russia.

 

“We regard the management team as having done an excellent job in a highly competitive industry and regard the Group as an excellent platform to continue the next phase of consolidation now underway within the sector,” Bridgepoint and CVC said in a joint statement yesterday.

 

Alchemy is expected to make further add-on acquisitions as the industry consolidates further across Europe. Under the deal, management increases its equity interest in the company. “We welcome the opportunity of working with a seasoned management team,” said Robert Barnes, a partner at Alchemy Partners, in a statement.

 

Bridgepoint and CVC Capital Partners received legal advice from Clifford Chance, while for Alchemy relied on its trusted advisers KPMG (financial) and Macfarlanes (legal).

 

News of the deal follows weekend reports that Alchemy was planning a flotation of British software services company Phoenix IT Group. Speaking to Reuters today, Alchemy chief Jon Moulton said that Phoenix is expected to debut on London's main market in May or June. The business is estimated to be worth about £200 million (€287 million; $369 million).