Charterhouse nets 2.1x on Elior – Exclusive

The firm will be keen to return capital to its investors as it continues to seek commitments to its €3bn Fund X.

Charterhouse Capital Partners has fully exited its remaining shares in European catering company Elior through two bilateral trades, Private Equity International has learned.

Following the sale, Elior, which is listed on Euronext Paris, will have generated cash proceeds of more than €1 billion and a gross return of 2.1x for investors in Charterhouse Capital Partners VII and Charterhouse Capital Partners VIII, it is understood.

Charterhouse declined to comment on the transaction.

Charterhouse took Elior private in 2006 in a €2.6 billion deal. On acquisition the company’s revenues were €3 billion and its EBITDA €256 million. As at September 2015 its revenues had increased to €5.7 billion and its EBITDA to €475 million.

As well as growing the France-headquartered business organically, Charterhouse worked with management to complete several add-on acquisitions to enter new geographies and adjacent sectors. These include the 2013 acquisition of US catering provider Trusthouse Services, the 2014 acquisition of City of London caterer Lexington, and the 2015 acquisition of Starr Restaurant Catering Group, a US high-end restaurant and catering group.

Charterhouse listed Elior on Euronext Paris in June 2014, and has subsequently made five placements of its shares, all above the IPO price of €14.75, it is understood.

The firm will be keen to return capital to its investors as it continues to fundraise for its latest offering, Charterhouse Capital Partners X, which is in market targeting €3 billion.

Charterhouse held a first close on the vehicle, which officially came to market in January 2015, on €1.5 billion last September, as reported by PEI.

Investors in Fund X include the Massachusetts Pension Reserves Investment Management Board, the Virginia Retirement System, the Maine Public Employees Retirement System, and the Public Employees Retirement Association of New Mexico, according to PEI Research & Analytics.

In October Fund X made its first investment, acquiring French pharmaceutical company Cooper from French investment company Caravelle in a deal valuing the company at around €700 million.

Its predecessor, the €4 billion Charterhouse Capital Partners IX, a 2008-vintage vehicle invested in 13 portfolio companies, has made seven exits to date, generating an average realised return of more than 3x, it is understood.

These include greeting card retailer Card Factory, which generated a 5.25x return and an internal rate of return of 47 percent, Environmental Resources Management, which it sold to OMERS Private Equity in a deal valuing the business at $1.7 billion and generating a 2.4x return and a 29 percent IRR, and European insulation manufacturer Armacell, which it offloaded to funds run by Blackstone and family-owned holding company KIRKBI A/S in a deal valuing the business at €960 million and generating a 3x return and a 54 percent IRR.

As at 11:05 today Elior’s shares were trading up 1.51 percent at €19.12 per share, giving the business a market capitalisation of €3.16 billion.