Hermes in third £50m+ MBO in six months

Bridgepoint, the mid-market pan-European private equity firm, has sold its majority stake in office services supplier OyezStraker in a transaction valued at £80m.

Hermes Private Equity, the private equity arm of Hermes Pensions Management, has backed the £80 million (€120 million; $146 million) secondary buyout of UK office supplies specialist OyezStraker Group.

The company has been acquired from Bridgepoint, which backed OyezStraker in three rounds of undisclosed funding, putting together Straker Office Supplies with law stationery company Oyez in 1997 and adding on stationery supplier Stat Plus in 2000.

OyezStraker runs a network of 24 service centres across the UK. In the year ending August 2003, the company generated an operating profit of £11.1 million on a turnover of £123 million. The deal was led by Justin Ward, a director at Hermes, and Mark Wordsworth, partner at Bridgepoint.

Commenting on the transaction, Hermes Private Equity chief executive Rod Selkirk said in a statement: “This is the third buyout capitalised at more than £50 million that we have completed in the last six months and underlines our strategy of identifying and working with strong UK middle market companies.”

Since the launch of the firm’s debut £200 million buyout fund HPEP I in 2003, Hermes has completed the buyout of Walbrook, a trust and company services arm of consultancy firm Deloitte in the Channel Islands. In February this year, Hermes acquired European attraction operator Merlin in a secondary buyout valued at £72.5 million.

The office supplies sector is set to see further activity later this week when O2O, another UK office supply company, will list on the London stock exchange. The IPO is expected to generate a 5x return for UK mid-market investor Gresham, which plans to sell its entire 57 percent stake in the £65 million-valued company for £32 million. Gresham originally invested £6.5 million in the company in 2000.

In related news Bridgepoint, according to reports in The Sunday Times, has signed an exclusivity agreement to buy UK pet company Pets At Home for £230 million. Bridgepoint reportedly beat off competition from a number of other private equity houses including Hg Capital, Cinven, Bain Capital and Electra Partners Europe.

Bridgepoint has also announced today that it has acquired a 60 percent shareholding in Grupo Mediasat, a Spanish publishing marketing services company. Financial terms of the deal, led by Bridgepoint partner Jose Maria Maldonado, were not disclosed, although reports indicate that the firm paid approximately €50 million for the stake.