dontuseKKR derails Exponent trainline IPO

KKR is set to acquire the ticketing service just after holding a first close on its European Fund IV

Kohlberg Kravis Roberts has agreed to acquire Trainline, a UK-based online retailer for rail tickets from London-based Exponent Private Equity – disrupting the initial IPO Exponent had planned.

Financial details of the transaction were undisclosed, but a market source told PEI the enterprise value was between £425 million and £450 million (€588 million, $683 million), which is around 10 or 11x EBITDA. It is understood KKR invested more than 50 percent of equity in the transaction but the precise amount of debt used in the acquisition is unclear.

The news of the transaction may surprise many in the industry as it comes just a few weeks after Trainline announced it would list on the London Stock Exchange. The IPO would have valued the company at around £500 million, PEI reported at the time.

Both Exponent and KKR declined to comment beyond their statements.

Trainline is the most downloaded travel app in the UK, according to KKR. The company has 4.7 million active customers, 20.8 million visits per month and operates platforms for both consumers and businesses. Trainline is licensed to sell rail tickets on behalf of all UK train operating companies, Deutsche Bahn and Trenitalia.

“Our vision is to transform Trainline into a leading international ecommerce platform and an indispensable partner of the smartphone-enabled digital mobility landscape,” Doug McCallum, Chairman of Trainline, said in the statement.

The acquisition will be the second deal KKR has made from its European Fund IV, which held a first close of more than €2 billion last week. The vehicle, which has a target of between €3 billion and €3.5 billion, will hold a final close later this year, PEI reported earlier this week.

Last July, KKR acquired a majority stake in Aberdeen-based OEG Offshore Group, using capital from its balance sheet. It invited LPs that were committing to Europe Fund IV to co-invest in the deal.

Exponent acquired Trainline in 2006 for £163 million (€238 million; $300 million) from a consortium of shareholders that included Virgin, Stagecoach and National Express transport groups. The firm made the investment from its debut £400 million fund, a 2004-vintage.

Exponent will be keen to return capital to investors as it continues to raise its third buyout fund. The vehicle, which is targeting £800 million (€1.01 billion; $1.3 billion) and has a £1 billion hard-cap, held a first close of around £500 million at the end of last year.