Doughty Hanson sells Balta stake to Lone Star

The UK buyout firm makes the eighth exit from its Fund IV

Doughty Hanson, a London-based mid market buyout firm, has agreed to sell its 70 percent stake in carpet manufacturer Balta Group to Dallas headquartered Lone Star Funds, the firm said in a statement. 

The sale will generate a return of 1.5x, an industry source said. The transaction value was not disclosed.

The deal is expected to close at the end of August and will bring the number of exits from its Doughty Hanson & Co IV fund to eight, the statement said. Investors have so far received 150 percent of their capital back.

The firm has three further investments to realise from its fourth fund, a 2003-vintage vehicle that closed at €1.5 billion. These are stakes in Italian electric air freshener company Zobele Group that it has held since 2006, French industrial group KPI that the fund invested in in 2007 and Ireland’s TV3 that it acquired in 2006.

The Balta stake, bought in 2004 from family owners, was held with other limited partner co-investors. The family and management held the remaining shares.

Balta Group employs 3,300 people across eight production facilities in Belgium and Turkey and a distribution centre in the US. It reported an EBITDA of €64.9 million in 2014.

In May, Doughty Hanson agreed to sell its stake in Netherlands-based fibre optic network provider Eurofiber to Antin Infrastructure Partners for €875 million, as previously reported by Private Equity International. That sale generated a return of 2.5x and a gross internal rate of return of 35 percent for its fifth fund, a €3 billion 2007-vintage vehicle.

The exit followed the announcement in April that the firm had cancelled fundraising for its sixth fund after it failed to meet its first close. The fund started marketing in October 2013 and was looking to collect €2 billion. The firm is now focused on realisations from its fourth and fifth funds, as previously reported.