Charterhouse further reduces Card Factory stake

The partial exit comes as the UK-based firm is currently attempting to raise approximately €3bn for its next fund

London-based Charterhouse Capital Partners has secured a partial exit by selling a further 40 million shares of Card Factory, a UK retailer that sells greeting cards, according to a company filing.

The shares, which were sold last Friday, had a combined value of approximately €143 million, according to a source familiar with the matter. The partial exit comes after Charterhouse sold 40 million shares, or 11.74 percent in Card Factory to Invesco last December having listed the business in Last May. The firm retains 60 million shares, or 17.8 percent in the company, following the latest sale. Charterhouse has so far netted a 3.7x return on Card Factory, the source added. Charterhouse declined to comment.

Card Factory was established in 1997 as a one-store discount retailer and has been developed, through organic growth and add-on acquisitions, into a value retailer. The business, which has more than 700 stores in the UK, sold over 285 million single cards in the financial year ended 31 January 2014. In that year, the group achieved revenue growth of 9 percent to £326.9 million and underlying EBITDA growth of 9.2 percent to £80.4 million, compared to £73.6 million in 2013.

Charterhouse acquired the business for £350 million from LDC in April 2010. The firm, which owned an approximate 60 percent stake, acquired the company using its Charterhouse Capital Partners IX No.1, Charterhouse Capital Partners IX LP No.2 and Charterhouse Capital Partners IX Co-Investment LP funds.

Charterhouse Capital Partners IX, a €4 billion vehicle, is currently valued at 1.8x, representing an internal rate of return of 27 percent, it is understood. Together with Card Factory, Charterhouse has exited three businesses from this portfolio. Last July, Charterhouse sold Bureau Van Dijk, a business and financial publisher specialising in private company information, to EQT, while in July 2012, it sold its stake in energy and metal industries research company Wood Mackenzie in a secondary sale to Hellmann & Friedman.

The firm is making renewed efforts to return cash to investors as it is currently in market raising Charterhouse Capital Partners X with a target of approximately €3 billion, sources with knowledge of the matter told PEI recently.