European buyout specialist Candover has made its second large investment in Belgium, agreeing to pay E625m to acquire a majority stake in Ontex, a Euronext-listed manufacturer based in Buggenhout.
Candover has reached agreement with founder and majority shareholder, the Van Malderen family, to acquire its near 78 per cent stake in the company, paying a significant premium to the Ontex share price prior to talks about a sale being announced in October.
In 1999, Candover completed its first major buyout in Belgium in 1999, acquiring Diamant Boart, a manufacturer and supplier of diamond tools. The company was sold earlier this year to Electrolux for E185m, a near £70m profit on the £45m it invested.
Candover will initially pay E87 per share to the controlling family, a price which will increase to E92 per share if the subsequent public offer to other shareholders gives the firm 95 per cent or more of Ontex stock. E92 represents a 51 per cent premium to the average price in the three months prior to the deal being reported in late October. It is also considerably above Ontex's closing price yesterday of E79.
Ontex manufactures feminine hygiene, baby diapers and incontinence products, both as private label products for large European retail chains and for hospitals and care homes. Since being set up by the Van Malderen family garage in 1979, the company has reported considerable growth, floating on the Euronext stock exchange in 1998. In 2001, the firm reported worldwide turnover of E725m.
Candover is backing the existing management team, led by Bart Van Malderen who will remain CEO and a significant shareholder via a substantial reinvestment in Ontex Newco, and Wilfried Van Assche as COO. Other members of the management team will also be offered an equity stake in Ontex Newco.
Candover made the investment from its 2001 Fund, which closed on E2.7bn in June this year. Barclays Capital is underwriting senior and mezzanine debt facilities. Candover was advised by ABN AMRO while the Van Malderen family was advised by Deutsche Bank.
Recent deals from the 2001 Fund include the joint E600m acquisition with Cinven of Kluwer Academic Publishers from its Dutch parent Wolters Kluwer and the E709m formation of insurance business Wellington Re.