The UK division of ABN Amro Capital, the private equity arm of ABN Amro has sold FPS Distribution, a UK-based automotive parts distributor to UK motor dealership Lookers plc for £31 million (€47 million; $57 million).
The transaction represents a more than 5x return on the firm’s initial investment of £5 million of equity in the £13.2 million management buyout from receivers in 2001, yielding an IRR of 75 percent.
The original investment was made from ABN Amro Capital’s Fund V alongside the provision of £8.2 million of debt by Lloyds TSB Commercial Finance. The firm acquired FPS from Finelist, the VC-backed UK distributor of car parts which went into receivership in 2000.
Finelist had been acquired by a consortium of private equity firms comprising CDC Equity Capital, Butler Capital Partners and Axa Asset Management Private Equity in 1999 in a highly leveraged PTP transaction. Having paid a 42 percent premium over Finelist’s share price, the consortium faced multi million pound losses when the receivers were called in.
The trade sale of FPS to Lookers was led by Patrick Bulmer and Paul Moxon for ABN Amro Capital. Commenting on the transaction, Moxon said: “”We took a calculated risk when we backed [managing director] Terry Wainwright and his team to buy FPS out of receivership. The two key factors were that FPS is an incredibly robust business and we backed a strong management team.”
The transaction is ABN Amro Capital’s seventh European exit this year and the second in the UK following the £225 million sale of healthcare products company Accantia to UK-based buyout firm Duke Street Capital.
ABN Amro Capital has also been active in the UK acquisitions market in 2004, having completed the £122.5 million buyout of British clothing retail chain Ethel Austin, and backing the £61 million buyout of refuse collection vehicle manufacturer Dennis Eagle.
Since the beginning of 2003, the firm, which has teams operating in 12 countries worldwide, has completed 17 buyouts and 14 exits in Europe.