CD&R to buy Brake Bros

The US buyout firm has agreed to pay £434m cash for the UK catering company.

Brake Bros, the UK catering firm, has agreed to a £433.7m ($653m) cash offer from US buyout firm Clayton Dubilier & Rice.

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The acquisition is being made by CDRP Acquisition which will pay 825p a share for Brake Bros. This is a 39 per cent premium to the group's share price of 8 March, the day before the company announced that it would conduct a strategic review of its business. This review was prompted by the announcement of chairman Frank Brake that he plannned to retire.

The Financial Times reports that the offer is unconditional as the Brake family, which owns 59 per cent of the shares, have agreed not to consider any other offers for the business. The acquisition will net £256.5m for the family.

The company's share price jumped nearly 9 per cent on news of the acquisition, gaining 70p to 817.5p. Brake Bros shareholders, who have been guaranteed their final dividend of 11.38p, are also being offered a loan note alternative to the cash .

CD&R has a reputation for eschewing acquisitions from newer sectors, preferring to concentrate on companies with strong franchises within traditional industries. Although headquartered in the US, the firm has been keen to grow its activities in Europe via its London office. Most recently the company was in the news as one of the owners of German aircraft manufacturer Fairchild Dornier which went into receivership in April this year.

Brakes Bros is being advised by Credit Suisse First Boston and CD&R is being advised by Merrill Lynch.