Deal Mechanic: Equistone Partners Europe & Global Blue

Over a five-year period, Equistone doubled revenue at tax services business Global Blue thanks to a series of improvements to the company’s products and services. Graham Winfrey reports

Last July, Equistone Partners Europe sold travel-related payment services company Global Blue to Silver Lake Partners and Partners Group for €1 billion – generating a return multiple of more than 4x.

When Equistone – formerly Barclays Private Equity – bought Global Blue (then called Global Refund) for €360 million in 2007, it was the second largest investment in the firm’s history. The Switzerland-headquartered business provides tax refund services for retailers to offer to overseas travellers visiting Europe: after making purchases at luxury goods stores within the European Union, foreign customers are able to claim tax refunds at Global Blue locations, which are primarily in airports.

One of the first companies to enter this market more than 30 years ago, by 2007 Global Blue owned roughly half of the market. It was also attractive to Equistone because it ticked two of its favourite sector boxes: financial services and consumer/retail.

The timing wasn’t ideal: the business had to cope not only with some unexpected shocks – such as when two volcanic eruptions in Iceland shut down European air travel for six days in 2010 – but also the global financial crisis, which inevitably had an impact on tourism.

Nonetheless, during Equistone’s period of ownership, Global Blue doubled its revenues and grew earnings before interest, tax, depreciation and amortisation from €35 million to €97 million. Here are some of the key operational drivers.


In order to drive growth at Global Blue, Equistone strengthened the company’s management team by adding a number of senior level executives.

It hired Philipp Manser, former chief financial officer of Hotelplan Europe, as Global Blue’s new CFO, and added Arjen Kruger, former chief marketing officer at MasterCard Europe, as CMO. The firm also brought in Henning Boysen, former president and chief executive officer of airline catering company Gate Gourmet, as non-executive chairman.

“Whilst the chief executive officer was very strong, we did feel that to develop the senior team with those additions was really important,” says Owen Clarke, Equistone’s chief investment officer.


One of the first initiatives Kruger spearheaded after joining the company in 2008 was a rebrand – in order to facilitate the launch of a number of new products and services tailored specifically for individual consumers, rather than just retail stores.

“As the new CMO, I felt that we needed a rebrand to be able to do that successfully – so we weren’t seen purely as a business-to-business organisation, and could start to build a brand that would appeal to consumers as well,” says Kruger. “So I put that strategy forward to the board and Equistone.”

After changing the name of the company from Global Refund to Global Blue, Kruger and Equistone helped add new products that encouraged repeat sales by offering shoppers loyalty schemes, introducing them to specific brands and enabling them to research various shopping locations.

 “All of a sudden, this was a brand that had a presence in the consumer space, which we’d never really had,” Kruger says. “We’re now starting to see the brand in the eye of the consumer.”


As part of this process, Global Blue focused on making the customer experience as seamless as possible. One way to do this was to digitise the process of customers getting their tax refunds, which had been largely paper-based in 2007.  

“You’d print out the form at the retailer, take that form to customs at the airport to get it stamped, then take it to the Global Blue booth at the airport to get your refund,” says Clarke.

Converting to digital not only enabled Global Blue to save on processing costs; it also increased the efficiency of tax-free shopping.

“[It] makes the whole process very traveller-friendly and indeed very retailer-friendly, which means that more people use the service,” Clarke says. “The bigger win was the fact that it just made the service better. It meant that travellers find it easier to get a refund.”

Annual transactions doubled under Equistone’s ownership – from 13.5 million in 2007 to 27 million in 2012.


While the majority of Global Blue’s customers in 2007 were Europeans traveling within Europe, one of the most significant changes Equistone helped implement was attracting more business from travellers in emerging markets.

“There’s been really strong growth in emerging markets [and] middle class appetite to travel and to buy luxury goods,” says Clarke. “Strategically, what we were doing was positioning the business to take advantage of that trend as much as possible – by opening additional offices and outlets in Asia, and by positioning an international website that was operated in Chinese and Russian as well as English.”

Today, roughly 70 percent of Global Blue’s revenue comes from emerging market countries such as Brazil, China, Indonesia, Russia and Singapore. The company now has operations in 42 countries, up from 37 at the time of Equistone’s investment.

“It was taking advantage of a trend that worked very much in the business’s favour – but making sure that we really rode that wave of increasing affluence of Chinese and other emerging market travellers who really wanted to come to Europe and other places and spend money on luxury goods.”

Handily, this also offset a fall in developed market travel after the onset of the financial crisis. “There were actually fewer Americans and Japanese travelling and spending, but more Chinese, Russians and Brazilians. So those sorts of things were balancing each other out,” says Clarke.


Though Equistone has already reaped a strong return on its investment, Global Blue is poised for continued growth under Silver Lake and Partners Group’s ownership, according to Kruger.

“The things that we were able to put in place whilst [Equistone] were our owners are really going to benefit us over the next four to five years,” he says.

One of the key strengths of Equistone as an owner, according to Kruger – and thus one of the main reasons for Global Blue’s success – was the firm’s highly collaborative style of working. This meant allowing the senior management team to put forward its own plans for growth – and helping to execute those plans when needed.

“They left a lot of discretion to management,” Kruger says. “[For] the issues that mattered and that were important to the future valuation of their investment, they very much had their hands on that. And that was appreciated.”

Clarke agrees. “It wasn’t a case where we came in with our operational partners or our own views and said, ‘You need to do this, that and the other’. This was [about] developing a strategic plan that the management team was leading.”