Electra Partners Europe, the European mid-market private equity firm, has agreed to sell UK-headquartered Safety-Kleen Europe to global private equity house JP Morgan Partners for £280 million (€420 million; $520 million). In a contested auction process, JP Morgan beat off competition from private equity firms Charterhouse, Candover and Bain Capital in the final round, according to a source close to the deal.
Electra first backed the business in a £110 million MBO in December 1998 in which parent company Safety-Kleen Corporation retained a 44.4 percent stake minority stake. In May 2000 Electra invested £23.7 million to acquire the remaining equity from Safety-Kleen Corporation. The 2000 investment was the inaugural investment from Electra’s €1 billion Electra European Fund.
The firm will garner approximately £100 million from the sale, representing just over 4x return on its original investment. Robert Clarke and Peter Wilson, London-based directors, led the transaction for Electra. Commenting on the acquisition process, which begain in 1997, Wilson said: 'The European division [of the Safety-Kleen group] was the Cinderella that had lots of growth potential.'
For the 12-month period ending June 2004, Safety-Kleen recorded EBITDA (earnings before exceptionals, interest, tax and amortisation of goodwill) of £28 million on sales of approximately £100 million for the same period.
In additional news, Electra and UK-based private equity house Englefield Capital have announced a £110 million refinancing of Global Solutions Limited, the security outsourcing business they acquired in a £207.5 million buyout in May.
The debt facility, which also comprises £60 million of working capital, was arranged by HBOS Group and will replace committed shareholder loan notes.