Arle takes last company from Candover fund

The exit of Innovia Group generates a 2.1x multiple and marks the final divestment from Candover’s 2001 Fund.

UK-based Arle Capital will acquire Innovia Group for €498 million, according to a statement.

Cumbria-based Innovia is an international manufacturer of labels, overwrap, packaging and polymer banknote material. The business recently supplied the material to the Bank of England for the new polymer £5 and £10 notes. The exit generates a 2.1x return multiple for investors in Candover Investments’ 2001 fund, which will be fully divested following completion of the deal.

Capital for the investment comes from a newly formed special purpose vehicle Arle has raised, which includes a €40 million cornerstone investment from Electra Private Equity. The special purpose vehicle invested €150 million in the deal,with the remaining being financed by debt, according to an Arle spokesperson.

Arle, which spun-out of Candover in 2011, currently manages Candover Investments’s portfolio, which consists of three vehicles; the Candover 2001, 2005 and 2008 funds, all of which are in realisation mode. Innovia was sold in an auction process run by Deutsche Bank. Arle decided to participate in the sales process and sought permission from LPs in the Candover 2001 Fund to acquire the business. It received “overwhelming support”, according to an Arle spokesperson.

Earlier this year, Arle refinanced Innovia with a high yield bond and raised €340 million.

“Under Arle’s management, Innovia has focused on product development and innovation in its core markets which has delivered strong profit growth against a difficult economic backdrop,” Richard Booth, an investment director at Arle, said in the statement.

Arle still aims to raise a blind-pool fund “in due course”, the spokesperson added. The exact timing and target size of this fund are unclear, but it will target mid-market buyouts of international businesses operating along the energy and natural resources supply chain.

As well as raising the energy-focused vehicle, Arle will continue to do buyouts on a deal by deal basis.