Equistone reaps €1bn from Global Blue exit

The sale of travel payment services company Global Blue to Silver Lake Partners and Partners Group means Equistone has returned almost two-thirds of Fund III to investors after just eight exits.

Silver Lake Partners and Partners Group have paid €1 billion to acquire travel-related payment services group Global Blue from Equistone Partners Europe. The two firms have reportedly funded the buyout with a larger-than-normal equity component, understood to be about 60 percent of the deal's enterprise value. Other firms that had been linked to the auction included TH Lee Partners, BC Partners, and EQT Partners.

Equistone, formerly Barclays Private Equity, acquired the company (then called Global Refund) in 2007 for €360 million. Although return details were not disclosed, based on a conservative 50:50 debt to equity split in the original buyout, the firm's return multiple is likely to be in excess of 5x.

The exit is the eighth from Equistone's third fund, a €2.45 billion 2007-vintage vehicle which has since been used to make 38 investments. Following the Global Blue sale, the fund has now returned about 60 percent of invested capital to its limited partners. Other recent exits by Equistone include clothing brand Jack Wolfskin to the Blackstone Group in August, and FirstAssist Legal Expenses to Burford Capital in December. 

Those exits, and this latest realisation, will help the firm close in on its €1.5 billion target for its first independent buyout fund, Equistone European Fund IV. The firm held a first close for the fund on €500 million in November. Last month, it held a fourth close on €1 billion.

During Equistone's period of ownership, Global Blue doubled its revenues and grew earnings before interest, tax, depreciation and amortisation from €35 million to €97 million.

The company, which is headquartered in Switzerland, provides traveller-related services including tax refunds, dynamic currency conversion and marketing services for merchants.

Equistone said in a statement it had worked with management to develop the company by targeting high-growth areas outside the European Union, to the extent that today, about 70 percent of its revenue is derived from emerging markets including Russia and China.

It also made changes to the management team, bringing in chief financial officer Philipp Manser (ex Hotelplan and Roche) and chief marketing officer Arjen Kruger (ex-MasterCard). It digitised stages of the tax-free shopping process to increase efficiency, developed the company's sales force, and centralised and improved its processing capabilities.

“In backing Global Blue in 2007, we identified a business with excellent management and compelling opportunities to improve its offering to international travellers and merchants,” said Owen Clarke, chief investment officer at Equistone. “We are proud to have worked alongside Per Setterberg [Global Blue chief executive] and the team to grow a business which has performed so strongly, even through the economic downturn.”

JPMorgan and Evercore advised Equistone on the sale, with Marlborough Partners providing advice on the debt side and Clifford Chance acting as legal advisor.