Electra backs Kunick MBO

European venture capital firm Electra Partners has teamed up with management in a public to private deal to acquire Kunick.

Electra Partners and Royal Bank Leveraged Finance have joined Kunick management to submit an offer for the UK gaming and leisure group. The offer, which was first mooted in January this year, values Kunick at just over £78m and represents a 25 per cent premium to the company’s valuation at the time of the original speculation.

Kunick has been hit hard by difficulties in the gaming industry and has made two adverse trading statements in the past two years. In a stock exchange announcement issued this morning, Kunick’s board cited ‘general lack of interest in smaller capitalised companies, a sentiment which the firm’s directors believe is unlikely to change ‘in the foreseeable future’.

In the financial year ended 30 September 2001, Kunick achieved turnover of £176.9m and pre-tax profit of £9.7m. The firm’s net assets are valued at £24.6m.

Robert Clarke, director of Electra Partners Europe, said he believed the firm would benefit from a withdrawal from the public markets. He added that Electra would provide the operational and financial framework necessary to continue the firm’s development.

Electra European Fund currently has E1bn of committed capital and invests in management buyouts in the UK and continental Europe. Electra Partners Europe specialises in private equity investment with a focus on management buyouts and buy-ins. Electra Partners Europe has offices in London, Paris and Frankfurt.