Electra sells Capital Safety for $565m

The UK-listed buyout firm Electra Private Equity has sold Capital Safety Group after nine years making five times its original investment with an IRR of 23 percent.

Electra Private Equity has sold safety harness business Capital Safety Group to rival buyout firm Candover for $565 million (€416 million).

Electra will make $174m from the deal, which is £62.9 million (€92 million, 125 million) above CSG’s valuation on 30 September 2006, an increase of 260 percent.

CSG sells DBI-Sala and Protecta height safety equipment. These are used by workers in oil and gas, telecommunications and construction, although the harnesses were originally designed for amateur climbing. Electra decided on taking over the company to shift its sole focus to designing products for workers.

The harness manufacturer has benefited in recent years from the rise in health and safety legislation principally in the US leading to an uptake in the use of its equipment.

David Symondson, from Electra, said his company had intended to invest over the usual three-to-five year period but his firm calculated holding on for longer meant the current rate of return was possible. “Ironically we probably made most of our return in the last two years,” he added.

Electra refinanced the company in 2005, realising £58.3 million. From this sum it reinvested £12.75 million and placed £5.65 million in the mezzanine loan of a holding company for the group.

Electra shares were up 5.74 percent at £17.02 at 1312 GMT.