Cinven agrees double deal with new fund

The Hugh Langmuir-helmed firm has made a double acquisition using capital from its latest buyout fund, which has now raised €3.5bn en route to its €5bn target.

London-headquartered buyout firm Cinven has agreed the acquisition of Turkish security alarm company Pronet and French coating and insulation business Prezioso.

Although the value of each buyout was not disclosed, sources close to the process indicated the deals were worth between €300 million and €350 million each.

There are still excellent opportunities to invest in first class European-based companies

Hugh Langmuir

Hugh Langmuir, managing partner of Cinven, said in a statement: “Pronet and Prezioso show that there are still excellent opportunities to invest in first class European-based companies whose prospects are not dependent on the European economy.”

The deals are the first to be funded with equity from Cinven’s latest buyout fund, The Fifth Cinven fund, which held a first close on €3 billion in March en route to a target of €5 billion. An investor source indicated the firm now has €3.5 billion in commitments. 

Cinven acquired Pronet from investors including Turkish private equity firm Turkven and the Dutch Development Bank. The company is the leading security systems company in Turkey, Cinven said in a statement, with more than 130,000 residential and commercial subscribers. Given the low level of market penetration by alarm system providers, Cinven has identified growth potential in Eastern Europe, Asia and the Middle East, it said.

Prezioso Technilor, meanwhile, was bought from mezzanine lender Indigo Capital. Indigo acquired the business from Silverfleet Capital (then known as PPM Ventures) in 2006. Indigo had originally provided mezzanine finance to back PPM's acquisition of the business from Barclays Private Equity France for €170 million in 2002. Indigo had previously tried to sell the business in 2009, with 21 Centrale Partners reaching exclusivity before the deal collapsed.

Prezioso, which is headquartered in France, provides coating and insulation services to the energy and infrastructure sectors. It counts energy companies EDF, Total, BP and Exxon among its clients. Its revenues have grown by more than 15 percent per annum over the last five years, with sales last year of €320 million.

Nicolas Paulmier, a partner at Cinven, said in a statement: “We have identified significant growth opportunities in other markets including Brazil, the Middle East and Northern Europe. This investment reinforces our strategy of finding European-headquartered businesses whose growth prospects are primarily driven by exposure to rapidly growing emerging markets.”

Prezioso's seven existing lenders have rolled over their commitments following the buyout, Cinven said.