Bure Equity, the Swedish venture capital manager, has sold its interests in funds managed by Swedish large-cap buyout investor Nordic Capital.
Following the sale in May of the bulk of its holdings in InnovationsKapital’s Fund III, the firm has announced the disposal of all of its holdings in Nordic Capital's funds II, III and IV, a E760m fund closed in June 2000.
Bure has invested in Nordic Capital funds since 1993, although it did not commit to the firm’s fifth fund, which earlier this year completed a E1.5bn fundraising.
Financial details of the transaction, or the identity of the buyer, have not been disclosed, although according to a statement issued by Bure, the total consideration is expected to result in a gain over book value of SKr146m (E16m). Bure also said that its net debt of Bure will be significantly reduced to around SKr245m as the transaction is completed through three additional instalments to be paid out during the next twelve months. Bure net debt prior to the sale stood at SKr958m, giving the transaction a total value of SKr713m (E77m).
Following the deal, Bure will have no outstanding commitments toward Nordic Capital but will retain an eight per cent holding in Mölnlycke Health Care and ten per cent of Elmo Leather, two of Nordic’s portfolio companies which Bure put money into directly as a co-investor. These holdings, with a total book value of SKr191m (E20m), were acquired in parallel with Nordic Capital's funds and will be divested in due course, according to Bure's CEO, Lennart Svantesson.
“The sale is in line with our established strategy to divest indirect holdings and to concentrate on our current portfolio of mainly unlisted companies', said Svantesson. “This was the major remaining [fund] interest following the sale of a 75 per cent stake of our interest in InnovationsKapital III fund.”
Svantesson confirmed that it was an “an international buyer of secondary and primary interests”, unlike the sale of its interest in InnovationsKapital, which was sold to a local buyer.
On 31 December 2002, the book value of Bure’s indirect and direct investments in the Nordic Capital companies amounted to SKr719m (E78m). Bure’s investments during the year amounted to SKr39m (E4.2m). Prior to the sale, approximately 62 per cent of the firm’s portfolio comprised direct investments.