Clean exit

AXA’s €600m sale of Spotless Group could provide a blueprint for future private equity ownership.

In a move that is hoped to help clean up private equity’s image, when AXA Private Equity sold Spotless Group to fellow European private equity firm BC Partners in February, it ensured that the company’s 300-plus employees shared in the proceeds.

AXA sold its 65.6 percent stake in Spotless, a European household and laundry product company, to BC Partners in a deal that value business at €600 million, a source close to the process confirmed. AXA made its first investment in Spotless in 2005, when it acquired French laundry and home care products, Eau Ecarlate. The group then embarked on a buy-and-build strategy that saw it make six acquisitions across Europe. It now operates through eight national subsidiaries in Europe and employs more than 300 people.

Spotless: clean exit

As part of the transaction, all of Spotless’ employees will receive a bonus equivalent to two months’ pay. It is not unheard of to pay out a bonus to employees a part of a buyout – AXA itself was part of a similar move when it exited Photonis Group, a high-technology group specializing in photo sensor technology, to Astorg Partners in July 2008. 

“The idea was to give a bonus to all the managers and employees and who were not investors in the deal,” Philippe Poletti, head of mid-cap leveraged buyouts for AXA, told PEI. “We believe that this is something extremely important. In our environment, sharing the value that has been created is something that for us is completely natural.”

A long-standing criticism from union leaders and certain politicians has been that buyouts benefit a relatively small number of individuals – namely the shareholders – rather than wider stakeholder groups, such as the employees. The increasing scrutiny of private equity ownership could lead to more payouts to employees as part of private equity transactions.

“We are not the only ones doing it, but it would be fantastic if this is something that would generalise to most other funds,” said Poletti.