Candover to back Swissport MBO

Candover’s first investment from its 2001 funds looks set to be the MBO of Swissair’s airport ground handling business.

Candover, the European buyout specialist, is in exclusive talks with Swissair to back the management buyout of Swissport, its airport group handling business. It has been granted a period of exclusivity in which to negotiate and complete the purchase, which will see Swissair retaining a minority stake in the business.

Swissport provides comprehensive ground-handling services for over 500 airlines at over 130 airports in 25 countries worldwide. For 2000 it generated revenues of CHF1.058bn (E697m).

Marek Gumienny, managing director of Candover, believes the buyout of Swissport will give it the financial resources to play an active role in the international consolidation of this industry. “We intend to work with management to grow the business both organically and through acquisitions to become the number one global ground handling company.'

Although no details of price have been disclosed yet, Charlie Green of Candover was able to confirm that it was a large buyout well in excess of £200m. He believes that the assumption that large buyout market is over priced is a gross generalisation. “Large buyouts have increased over time. The buyout market in both US and Europe has grown pretty consistently and strongly since about 1995,” he argued.

Recent large European buyouts led by Candover include the E920m acquisition of leading frozen food business Picard Surgelés from Carrefour; the E1.8bn acquisition of Rank Holidays Division by Bourne Leisure and the E160m buyout of Belgian based diamond tool manufacturer, Diamant Boart.

This is Candover’s first invesment from its 2001 fund, which had a closing of E1.5bn commitments. A final closing of around E2.5bn is expected at or around the end of the year, which will bring its total funds under management to E5.4bn.