While many of us took a break and unwound during the holiday season, several firms kept busy wrapping up big deals at year’s end.
North America had a spate of deals completed during the allegedly quiet final week of the year, including the $1.8 billion acquisition of UK insurer Aviva’s US division by Apollo Global Management. The Carlyle Group was part of a consortium that took private consultancy Duff & Phelps and SK Capital Partners carved out three business units of chemical maker Clariant for around $550 million. Also, American Capital committed $212 million to the buyout of Cambridge Major Laboratories and a Warburg Pincus affiliate acquired JHP Pharmaceuticals.
Across the pond, Sun European Partners ended 2012 with two deals in the packaging industry. The firm acquired UK-based Paragon from London-headquartered Equistone Partners, in an all-equity transaction valued at around £150 million (€185 million, $244 million). This came right after Albéa, a perfume and cosmetic packaging business Sun owns, completed the acquisition of Rexam Personal Care’s cosmetic division, a producer of make-up packaging. The Paragon deal was Equistone’s fifth exit of 2012.
Paris-headquartered PAI Partners acquired IPH Group, a European industrial supplies distribution company, from Bahrain-based Investcorp for an undisclosed sum. Headquartered in Lyon, IPH has turnover of €895m and employs 3,280 people in France, Germany, Belgium, the Netherlands and Romania. Previous reports said the value of the company could reach €500 million.
Cinven partially exited Avio, an aerospace group headquartered in Italy, through the €3.3 billion sale of its aviation division to General Electric. The business was owned in conjunction with Fenmeccanica, an Italian high-tech industrial conglomerate. Both companies retain full ownership of another of Avio’s core business line, its space unit that designs and manufactures components for commercial satellites. The transaction brought the proceeds realised by Cinven’s Fund IV to around 60 percent of the capital deployed.
EQT bought E.ON Energy from Waste.
EQT sealed its last deal of the year with the acquisition of a 51 percent of E.ON Energy from Waste (EEW) from E.ON. EEW produces electricity, heat and steam in 18 waste incineration plants in Germany, L uxemburg and the Netherlands, with sales of €544 million in 2011. The deal was financed by EQT’s Infrastructure Fund II.
Sticking with energy, Terra Firma’s Rete Rinnovabile bought a portfolio of 31 solar power plants from Acea, an Italian public utility, for €103 million. The transaction was funded through a mix of equity and a project finance facility provided by Mediocredito Italiano, a subsidiary of Italian bank Intesa Sanpaolo. It was Terra Firma’s fifth renewable energy investment of 2012.
Elsewhere in Europe, UK-based Apax Partners sold LR Health and Beauty to Bregal Capital for an undisclosed sum. LR Health and Beauty, which sells cosmetics, fragrances and nutrition products in Germany and other European countries, posted sales of €230 million in 2011. Acquired by Apax in 2004, it was one of the firm’s oldest investments.
Antwerp-headquartered Gimv rounded off 2012 with the acquisition of a 49 percent stake in Delcredere NV, a Belgian insurer, for €36 million. The shares were bought from ONDD, Belgium’s public credit insurer, following a competitive bidding process. Delcredere, which specialises in short-term export credit insurance, reported sales of €95.1 million in 2011. The deal was the sixth investment by the firm’s Gimv-XL Fund.
Poland also had its share of Christmas cheer. Central and Eastern European specialist Mid Europa Partners sold Lux Med, a provider of healthcare services in Poland, to UK’s Bupa, in what the firm claims is the country’s largest deal of the year. The transaction valued the company at €400 million, and brought Mid Europa a healthy 2.5x return on investment.
Carlyle exited Qualicaps to Mitsubishi.
2012 ended with a bang in China too. In what is the country’s largest ever private equity deal, Shanghai-based Focus Media Holding agreed to be bought by a consortium led by The Carlyle Group for around $3.7 billion. Focus Media, which operates advertising screens in offices, elevators, and supermarkets across China, had been under fire from short-seller Muddy Waters for allegedly overstating its assets and overpaying for acquisitions. This did little to ruffle Carlyle and its Chinese partners, which first made an offer for the New York-listed company in August. The consortium also included FountainVest Partners, CITIC Capital Partners and China Everbright.
That was not all for the People’s Republic, which saw Hong Kong-based Unitas Capital acquiring ZTE Netview Technology from ZTE Corporation for RMB 1.3 billion (€151 million, $200 million). ZTE, one of the world’s largest providers of telecommunications equipment and network solutions, is following through with its programme of divestment from non-core assets. ZTE Netview supplies systems to monitor telecommunications radio base stations and internet centres, and surveillance systems.
The Carlyle Group also exited Qualicaps to Japan’s Mitsubishi Chemical Holdings for a reported ¥55.8 billion (€487 million, $660 million). Qualicaps is the largest provider of pharmaceutical capsules in Japan and the second largest in North America and Europe. Carlyle, which first invested in the company in 2005, said revenue and EBITDA have increased by more than 50 percent and 120 percent under its ownership.
Bain Capital and Advantage Partners sold MEI Conlux Holdings and its Japanese affiliate to Crane Co, a US manufacturer of engineering product. The transaction was valued at $820 million. MEI provides payment solutions for unattended transaction systems and had sales of approximately $400 million in 2012.
Asia played host to another successful exit in late December. The Abraaj Group realised its investment in restaurant chain Hot Pot through an IPO on the Thai stock exchange, in its third Southeast Asian realisation of the year. It had previously sold its stake in Yupi, an Indonesian confectionary company, and exited Cyrtek, a semi-conductor business, through an IPO on the Philippine Stock Exchange. The firm, which first invested in Hot Pot in 2006, said that its latest IPO was more than three times oversubscribed.