Europe

EuropeDeals & Exits
GMT takes French weekly stake
UK-based communications sector investment specialist GMT Communications Partners has taken a stake in French weekly recruitment publication Le Marché du Travail. GMT invested through Cimarosa Communications Holdings, alongside William Riedel, the publishing director of Le Marché du Travail. Terms of the transaction were not disclosed.

“GMT had not invested in consumer special interest press in France since 1996,” Jeff Montgomery, managing partner at GMT Communications Partners, said. “Le Marché du Travail is the independent leader of the French recruitment press, and has a unique brand illustrated by its customer database of 70,000 companies.”

CVC buys E.ON metering unit
CVC Capital Partners, the European private equity house, has agreed terms with German utility group E.ON to acquire Viterra Energy Services, an energy metering business for €930m, including debt of €85m. CVC beat off competition from several private equity firms, including Permira. Viterra Energy Services is part of Viterra, E.ON's real estate subsidiary. E.ON is required to sell Viterra in order to comply with US competition regulations following the acquisition of UK-based electricity business Powergen.

The asset provides consumption-dependent energy metering services in 28 countries. In its last full year results in 2001, the company increased sales by twelve per cent to €418m while operating profit increased by a similar margin to €95m. The company employs over 3,500 people.

CVC acquires Danish building group
European private equity house CVC Capital Partners has launched a public to private takeover bid to acquire Danske Trælast, a Danish retailer and distributor of building materials, in a deal worth DKr4bn (€540m). CVC has agreed to pay DKr171 per share to Danske's three largest shareholders, Codan, ATP and LD, who between them control almost 50 per cent of the company's shares. The offer price constitutes a 39 per cent premium to the closing share price before the announcement of talks about a possible takeover was made. Danske Trælast Group is the largest retailer and distributor of building materials in the Nordic region with 7,000 employees, more than 200 outlets and an annual turnover of approximately DKr15bn.

BC Partners pips rivals for cable deal
Deutsche Bank and BC Partners have reached agreement over the acquisition of TeleColumbus Group for a total consideration of E510m. BC Partners was one of several private equity groups, including a consortium of Apax Partners, Providence Equity and Goldman Sachs Capital Partners, which submitted offers for the business.

TeleColumbus Group is among the leading cable providers in Germany with 2.3m cable customers and revenues of circa E235m in 2002. “We like the stable and defensive nature of the business model of TeleColumbus, as well as its leading competitive position,” said Raymond Svider, senior partner at BC Partners who led the transaction team, in a statement.

BC Partners will acquire the group in association with its management team. HypoVereinsbank, ABN AMRO and Royal Bank of Scotland will provide the debt facilities. The transaction is subject to approval by the German cartel office.

Barclays PE backs insurance buyout
UK private equity firm Barclays Private Equity has agreed terms with UK insurance giant Royal & SunAlliance (R&SA) over a £147m deal to acquire the insurer's healthcare insurance business.

Under the terms of the agreement, Royal & SunAlliance will sell its healthcare insurance operations and its subsidiaries, FirstAssist Group and R&SA Healthcare Administration. These businesses carry out private medical insurance, personal accident insurance, hospital cash plan insurance and travel insurance services, as well as providing a range of related assistance services.

Carlyle agrees €1.6bn Fiat Avio deal
US private equity firm The Carlyle Group has signed a letter of intent to acquire Fiat Avio, the aircraft engine-manufacturing unit of troubled Italian industrial giant Fiat. The deal covers all of Fiat Avio's aerospace and aeronautical activities – including aeroplane, rocket and satellite engines – and is valued at €1.6bn.

Carlyle partnered with Italian defence company Finmeccanica in order to seal the deal. Finmeccanica is understood to have agreed to acquire 30 per cent of FiatAvio under the deal outlined in the preliminary talks. FiatAvio has 14 plants, nine research centers and approximately 5,000 employees. The company recorded a turnover of €1.5bn in 2002, with an operating profit of €210m.

Barclays, Arca take Cremonini unit stake
Barclays Private Equity and Arca Impresa Gestioni, the private equity unit of Italian merchant bank Arca, have teamed to take a 33 per cent stake in Magazzini Alimentari Riuniti Riminesi (Marr), the food distribution unit of Italian food group Cremonini, in a deal worth €100m. The two firms bought a twelve per cent stake in Marr from Cremonini, paying €35m. The remaining 21 per cent will be acquired via a capital increase that values the business at €300m. Marr was set up by Cremonini in 1972 and supplies food and non-food goods to restaurant operators in Italy. The company employs 1,300 people and manages 19 distribution centres.

Cinven buys Fitness First
UK private equity house Cinven has confirmed its long-awaited offer for health and fitness group Fitness First, with the two groups agreeing the terms of a £204m public-to-private offer for the business. Cinven has backed management led by CEO Michael Balfour in the formation of a new company, Moray.

The company has net debt of £198.8m, giving the deal a total value of just over £400m. Financing for the transaction has been arranged and fully underwritten by Bank of Scotland and Royal Bank of Scotland. Cinven has put in place debt facilities of £331m comprising £261m in acquisition financing, £50m of capital expenditure facilities and £20m of working capital facilities.

Alchemy backs Seymour Pierce deal
Seymour Pierce has completed the first part of its disposal strategy after UK turnaround specialist Alchemy Partners agreed to back senior management in the acquisition of the UK-based broker's investment banking division.

The unit comprises the corporate finance, corporate broking, institutional sales, research and trading and private client stockbroking businesses of Seymour Pierce Limited and Seymour Pierce Ellis.

Alchemy has joined forces with current Seymour Pierce chairman Keith Harris and Richard Feigen, the group's head of investment banking, in a deal that values the business at £7.35m. It comprises payment for net assets of approximately £4.35m and goodwill of £3m. The loss before tax attributable to these assets in the year ended 30 September 2002 was £0.49m.

Greenfield grabs mmO2 Dutch unit
Greenfield Capital Partners, the Dutch telecommunications private equity specialist, has acquired O2 Netherlands, the lossmaking Dutch unit of British mobile telecommunications business mmO2.

Greenfield agreed to pay €25m in cash for the business, which reported turnover in the twelve months to 31 March 2002 of €292m. O2 Netherlands currently has some 750 employees and had approximately 1.25m customers as at 31 December 2002. mmO2 said the sale would result in a provision for loss on disposal of £1.4bn.

EQT sells Stenqvist to Triton
Stockholm-headquartered private equity firm EQT Partners has sold its Swedish packaging materials business Stenqvist to German private equity firm Triton. Terms for the deal have not been disclosed. Stenqvist's products comprise paper and plastic based packaging products for retail and industrial use such as bags, carrier bags and reels for flexible packaging.

“During EQT's ownership Stenqvist has accelerated growth and improved profitability,” said Thomas von Koch, partner at EQT Partners, in a statement. “Complementing Stenqvist's strong management team with an experienced and committed board of directors has contributed to making Stenqvist a very successful investment for EQT.”

AXA completes Tokheim MBO
Paris-based AXA Private Equity has finalised the management buyout of Tokheim International, a manufacturer and service provider of gas station equipment in Europe and Africa. AXA Private Equity and Tokheim entered exclusive negotiations in December. AXA has paid around €140m in addition to €8m of debt. AXA will own 94 per cent of the Tokheim subsidiary, while six per cent will be held by the management led by Patrick Berthon, who was vice president of sales for the business unit. Debt financing for the transaction was arranged by BNP Paribas. It includes senior and mezzanine financing as well as a revolver facility.

Equinox buys Prada unit stake
Equinox Investment Company, the Luxembourg-based investment firm backed by a number of major Italian groups including Banca Intesa and Pirelli, has taken a 45 per cent stake in Church's, the English shoemaking business owned by Italian fashion house Prada.

Financial details for the agreement have not been disclosed. The deal comes less than four years after Prada agreed to pay £106m for the business. Equinox and Prada agreed to provide additional capital for Church's. The price is expected to be lower than Prada paid in 1999.

NIB buys €315m Dutch payroll services group
NIB Capital Private Equity has reached agreement with Dutch support services group Getronics over the terms of a deal to acquire its payroll services unit. NIB is backing management in a €315m offer for Getronics HR Solutions (GHRS), the largest provider of payroll services in the Netherlands.

Parent company Getronics, which confirmed last month that it was planning to sell the business for around €300m, said the sale would yield a book gain of €270m. Alexander van Wassenaer, buyouts partner of NIB Capital Private Equity, said: “In terms of size and activity, this transaction fits perfectly in our buyout portfolio. We invest in niche market leaders with a clear strategy and entrepreneurial management with a good track record, which we certainly found at GHRS.”

Barclays PE buys ECI investment
Barclays Private Equity, the mid-market private equity unit of Barclays Bank, has backed the €44m management buyout of The NCC Group, a company specialising in independent third party protection and storage of business critical software. Barclays is taking a 65 per cent stake in the business, previously part of the National Computing Centre, with the current management of the division leading the transaction. The company reported sales for the financial year 2002-2003 of €19m.

The deal provides an exit for UK private equity firm ECI, formerly known as ECI Ventures. ECI led the initial buyout from National Computing Centre in 1999 in a £6m transaction.

BA Capital acquires French car parts business
BA Capital Partners Europe, the European private equity arm of Bank of America, has taken a majority equity stake in French automotive precision mechanics and bar-turning company Enricau. The financial terms of the transaction were not disclosed. Enricau, which is centred around the Lyon/Geneva area, supplies parts to a wide range of final applications and systems mostly for the automotive industry, including injection systems, steering systems, climate control systems and engine parts and fasteners.

MB Funds invests in motor inspection platform
MB Funds, the Finnish private equity firm, has acquired Suomen Autokatsastus (SA), the Finnish motor vehicle inspection company, in a take-private transaction. MB Funds has agreed to pay the Finnish government €59m for the business, which reported net sales of around €62m in 2002. Inspection services are the main business of Suomen Autokatsastus, although the company also carries out other services including vehicle registrations and drivers' examinations. The company employs over 1000 inspectors and has around 150 inspection stations across Finland.

2002 strong exit year for BPEP
Baring Private Equity Partners (BPEP) has reported its best year on record for exits in 2002, completing 17 divestments across European, Asian and Latin American markets.

The firm's 17 exits resulted in total returns of €181m, dominated by deals in Europe and Asia. In addition, Baring Latin America Partners completed three successful exits from companies held by the South America Private Equity Growth Fund – which Baring has advised since December 2001.

Chris Brotchie, CEO of BPEP said: “Despite turbulent economic conditions and political uncertainty, we continue to find buyers willing to pay attractive prices for strategically interesting companies. We have managed to sell at an average multiple of nearly 2.3 times cost to buyers prepared to recognise in full the specific and real value we have added to each investment.”

Triton syndicates Tetra stake to Axa
Triton, the private equity firm operation in Germany and the Nordic region, has sold a 22 per cent stake in aquarium and pond supply business Tetra to Paris-based Axa Private Equity. The deal comes less than six months after Triton's original acquisition of Tretra from Pfizer, the pharmaceuticals group.

The terms of the deal have not been disclosed, although Triton paid Pfizer just under $240m for the business in November. Royal Bank of Scotland completed the financing of the transaction with senior and mezzanine debt facilities.

Pfizer acquired Tetra as part of its merger with Warner-Lambert in 2000. Tetra is headquartered in New Jersey with a research centre in Melle, Germany, were the business was set up 50 years ago. Pfizer opted to sell the business as part of a restructuring to divest itself of businesses that were acquired as part of the Warner Lambert deal.

EuropeFunds & Buyside
Euroventures and Nordico to merge
Nordico and Euroventures, two Swedish mid-market private equity firms, have announced plans to merge their operations. CEO of the merged company will be Nordico's current CEO, Jan Ohlsson. uroventures' current CEO, Thomas Wernhoff, will be deputy CEO.

The managers, both based in Sweden, have secured €50m in start-up capital from The Sixth AP Fund and Dansk Kapitalanlæg for a new €300m fund to invest in Nordic mid-market opportunities. A €100m first close is scheduled for June, with a final close likely to be held in the next six to twelve months.

Wernhoff said talks over a merger had begun in the last two months. “We realised it would be advantageous to both parties if we were to achieve critical mass. Last year, Euroventures set out to raise €150m, but a fund of that size is often too small for some institutional investors who look to commit a minimum of €15m but do not want to invest more than ten per cent of the entire capital of a fund.”

Hutton Collins lowers fund target
Hutton Collins, the UK-based mezzanine finance firm set up last year by Graham Hutton and Matthew Collins, has admitted that a lack of appetite among LPs is likely to impact on its current fundraising programme.

The company originally aimed to raise as much as €500m for investment in large European buyouts. However, in an interview with Bloomberg, Hutton said the €500m was likely to be unachievable in the current market. “I would be happy to close the fund at €250m,” Hutton told Bloomberg. “It's very tough to persuade investors to make a decision. Everyone is extremely cautious.”

B&S to exceed target at second closing
B&S Private Equity Group, the Italian mid-market private equity firm, has readied its €500m target for its fourth fund within seven months of launching the fund.

B&S partner Francesco Sironi said the firm would continue its previous strategy of investing in mid-market industrial opportunities in Italy in the €30m to €100m value range. IPEF IV will not make investments until the summer, by which time predecessor fund IPEF III is likely to be 85 per cent invested.

“There has been a marked improvement in the Italian market during the last twelve months. Private equity is establishing itself as a real alternative in Italy. When someone is looking to sell a business, the first people they speak to are the private equity firms,” said Sironi.

Nmás exceeds €150m target at final close
Madrid-based private equity firm NMás1 has closed its latest fund, Nmás1 Private Equity, above the original target of €150m at €175m.

The new fund will invest in parallel with Dinamia, a €154m publicly listed investment trust also managed by NMás1, giving available investment capital of €329m. The fund has attracted a diverse range of international investors from the US and Europe including Access Capital Partners, Allianz Private Equity Partners, LGT Capital Partners and a number of Spanish investors.

“The fundraising has been achieved over a relatively short period in what is a challenging fundraising environment,” said Nmás1 managing director Jorge Mataix. “The Spanish private equity market is still less developed than certain other markets in the US and Europe and therefore we believe that there remain significant opportunities for investment.”

Strong income growth for fundraising ICG
UK-listed mezzanine capital specialist Intermediate Capital Group has reported a steady increase in pre-tax profits to £53.5m in its results for the year ended 31 January as it embarks on fundraising for its new Mezzanine Fund 2003.

ICG arranged financing of £523m during the financial year 2002, the highest ever completed by the firm. In total, the firm made 22 loans including a £40m participation in Charterhouse's £1.2bn acquisition of Coral Eurobet.

Tom Attwood, managing director at ICG, said that despite the decline of the European economy, the firm's portfolio continued to do well. “We have made new provisions on three underperforming loans although the remainder of the portfolio is doing well,” said Attwood. “On the whole, it's been a strong couple of years for mezzanine and we're hopeful that 2003 will be the same.” In January the firm launched Mezzanine Fund 2003, a €750m successor to the €475m Mezzanine Fund raised in 2000.

LBO France to target small buyouts
LBO France, the French private equity house headed by Gilles Cahen-Salvador, is to focus on smaller LBOs for its sixth fund,

Hexagone, which it launched in April. LBO France, which normally makes investments of between €50m and €500m, is seeking to raise €50m for French LBOs across all sectors, targeting investment in businesses with enterprise values ranging from €10m to €50m.

LBO France team will manage the Hexagone fund alongside its White Knight mid-market LBO fund. The firm has recruited Jean-Marie Leroy to work specifically on Hexagone investments. Leroy joins the firm from BNP Paribas, where he specialised in small transactions.

Opera set for second fund
Opera Fund, the private equity unit of Italian luxury goods manufacturer Bulgari, has confirmed that it is planning to raise a second fund targeting opportunities in the Italian luxury goods and services sector.

Opera, headed by former Morgan Grenfell Private Equity director Renato Preti, is planning to raise €250m for the Opera II fund, which it hopes to have achieved by the beginning of 2004.

As with Fund I, Bulgari, which controls 50 per cent of the management company, will be a cornerstone investor in the fund.

Preti said he believes the next few years will present improved opportunities for private equity players in the Italian market as valuations continue to fall.

“More specifically, there will be interesting opportunities for investing in the Italian lifestyle sectors given the current consolidation process and the need for medium sized Italian companies to reaffirm themselves in the international market.”

Gamma launches rare Austrian VC fund
Gamma Capital Partners (GCP), the Austrian early stage investment firm, has held a first close of its new €25m fund, Gamma II Beteiligungs, at €10m.

The announcement comes less than a year after GCP took over the management of former VC incubator iLab24. Gamma II is described as a generalist technology fund that will invest in Austria and its neighbouring countries.

The fund will target hightech oriented growth-companies in areas such as ICT, life sciences, medical equipment and electronics.

Oliver Grabherr, managing partner at Gamma, said he is upbeat about the investment prospects for GCP.

“In addition to attractive valuations, competition has virtually withered away – we get proposals from as far as Hamburg and Switzerland and appear to be one of the very few active techinvestors in Germanspeaking Europe considering attractive smaller opportunities.”

Lead Equities exceeds target for debut fund

Austrian private equity firm Lead Equities has defied a tough fundraising environment to exceed the €40m target for its debut fund. The majority of the capital for Lead Equities I was provided by major Austrian financial institutions, including Investkredit, Generali Insurance Holdings and Hypo Alpe-Adria. Lead Equities' management have also contributed to the fund.

“It's a strong sign of confidence in our investment approach and the developing Austrian market” a spokesperson for Lead Equities said. “Whilst fundraising was challenging, especially for a first-time fund, our industrial and managerial network clearly set us apart from competition and proved a strong selling point to investors.”

Graphite Enterprise surpasses £300m target
Graphite Capital, the UK-based mid-market private equity firm that spun out of asset management group Foreign & Colonial (F&C), has announced the final close of its first fund since gaining independence in 2001. The fund has closed 25 per cent above the original target of £300m, ranking it among Europe's top fundraisings completed in 2003.

As with Graphite Capital's previous funds, Graphite Capital Partners VI will focus on small and medium-sized UK management buyouts, buy-ins and development capital investments. New investors included Pantheon Ventures, ATP Private Equity Partners, Local Government Pensions Institution of Finland, funds managed by Nordic Advisors and funds managed by Standard Life Investments.

Rod Richards, managing partner at Graphite, said he was very pleased with the support from both new and existing investors, “particularly as we were raising the fund in such uncertain times. There appears to be very strong investor interest in the mid-market at present and our fund was well positioned to take advantage of this.”

EuropePeople
3i closes Dublin office
3i, the UK-listed private equity firm, has announced that it is to close its Dublin office.

The firm said that the slower-than-expected development of the Irish private equity market, which has been impacted by the general economic slowdown, has been the principal reason for the office's closure. Clive Austin, head of 3i's Irish operations, will return to London, although the firm will continue to make investments in Ireland.

“3i has completed a number of investments to date in Ireland and believe that further opportunities may arise in the future as the local private equity market develops,” said Austin. “However, in the near term we do not see sufficient activity to support a dedicated local presence,”

Activa Capital grows investment team
Activa Capital, the Paris-based private equity house backed by Hermes Investment Management, has taken its team of investment professionals to seven with the appointment of Christophe Parier as an investment director.

Parier joins the firm from Royal Bank Private Equity France (RBPE France), where he worked on the firm's French MBO portfolio. Previously he spent three years at 3i France, working within the firm's MBO team.

Charles Diehl, one of Activa's four partners, said Parier would make an immediate contribution to the firm's deal execution process. The firm is currently putting the finishing touches to its debut deal, the acquisition of Mont Blanc, a dessert business owned by Nestlé.

Activa is currently in the process of raising its debut fund, Activa Capital Fund FCPR, which held a first close on €90m in January. The fund is seeking to raise a total of €150m, of which Hermes Investment Management has agreed to provide 25 per cent.

Inflexion builds healthcare team
Inflexion, the UK midmarket private equity firm, has added Tony Caplin to its advisory team, the firm's fourth such hire in the past twelve months. Caplin, deputy chairman of Barts and the London NHS Trust, one of the largest health trust in the UK, will join the healthcare advisory team.

Inflexion's advisory panel now includes Andrew Burns, finance director of Luminar Leisure, Geoff Westmore, a former global leader of transaction services at PricewaterhouseCoopers, Roger Laughton, former CEO of United News & Media and Stelio Stefanou, chief executive of Accord who joined the firm last September. The panel provides Inflexion with dealflow as well as due diligence services.

Coller sets up in New York
Coller Capital has appointed Frank Morgan to head the firm's newly-launched New York office. Morgan joins the firm from US law firm Dewey Ballantine, where as a partner he focused on capital markets, private equity/venture capital, investment management and technology. He has advised Coller on transactions and other strategic matters since the firm was launched in 1990.

Coller Capital head Jeremy Coller said the move reflected the growing level of business being executed in the US. “Establishing a permanent presence in the United States, where 42 per cent of our capital originates, where some 38 per cent of our assets are located, and where we already spend a substantial amount of time, makes perfect sense.”

The UK secondary firm has also appointed former NIB Capital secondaries investment director Erwin Roex to its London offices. Roex, a Belgian national, previously held roles in finance and private equity in Europe, including most recently as founder and head of NIB Capital Private Equity's secondary investment business.

Roex was previously managing director of NIB Capital Private Equity predecessor Alpinvest Mezzanine. One of his achievements there was to lead what at the time was Germany's largest mezzanine transaction, a DM110m financing for the management buyout of heavy truck manufacturing industry supplier Jost.

Nova Capital hires portfolio director
Nova Capital Management, a London-based private equity firm set up last year to take over the management of private equity and venture capital portfolios, has appointed former Texaco director Andrew Paszkowski to oversee the firm's debut portfolio.

Paszkowski, a former Texaco divisional managing director, will be responsible for the management of the Lica portfolio. Paszkowski has more than 25 years' experience in operational and business development, including positions with Gulf Oil International and downstream and upstream positions at Texaco.

Correction
The PEI 2003 placement agent directory published in last month's issue contained an error on page 41. Placement agency BerchWood Partners represents private equity funds of all types and not, as stated, funds that are $100m or smaller in size.