Granville Baird Capital Partners (GBCP), the European mid-market buyout firm, has bucked the trend for internet investments made during the tech boom, achieving a multiple of four times its investment on selling German classified ads website Mobile.de.
Global auction website eBay is to purchase Mobile.de for approximately €121 million in cash, subject to regulatory approval in Germany and other closing conditions. The deal is expected to complete in the second quarter of 2004.
Mobile.de was the first investment made by Granville Baird Capital Partners (GBCP) after opening its office in Hamburg, and also marks the firm’s first exit in the country.
GBCP made a total investment of €8.8 million in Mobile.de over two rounds in 1999 and 2001. It was the sole financial investor in the business. “We initially intended to syndicate the second round of financing of Mobile, but the potential partner backed out after the tech bubble burst,” said David Martin, a managing director at Granville Baird Capital Partners.
“Back in 1999, we recognised that Mobile.de had a business model which was highly likely to succeed as the internet developed,” Martin added. “It wasn’t all plain sailing but the right combination of skills enabled the business to become profitable by 2001. The management team have contributed a rare combination of technical and marketing skills, underpinned by their experience in used vehicle sales, to support the development of the business.”
GBCP held an equity stake of 29.5 per cent stake in the business, with the company’s four founding partners holding the remainder. “We expect to deliver returns of approximately 4x to our investors,” said Martin.
The firm’s Hamburg-based team has now made a total of nine investments. “All of our German portfolio companies have grown since we invested and we expect to announce a further exit in the next couple of months,” said Martin.
Overall, GBCP currently has a portfolio of 29 investments.