H&F acquisition values Wood Mackenzie at €1.4bn

Hellman & Friedman has acquired a majority interest in energy sector research group Wood Mackenzie from European buyout firm Charterhouse.

Charterhouse Capital Partners has partially divested its interest in energy and metal industries research company Wood Mackenzie in a secondary sale to Hellman & Friedman.

Charterhouse keeps 13 percent of its stake, leaving Hellman & Friedman with 63 percent of the Scottish company, according to a statement.

The deal values Wood Mackenzie at £1.1 billion ($1.7 billion; €1.4 billion), and delivers to Charterhouse a return of more than double its initial investment.

Charterhouse paid £553m for Wood Mackenzie when it bought the company from rival firm Candover in 2009. The deal was the biggest UK buyout that year.

The investment from Hellman & Friedman came from the firm’s seventh fund, which was raised in 2009, and is currently around 30 percent invested. Wood Mackenzie's predicted earnings before interest, tax, depreciation and amortisation in 2013 are in excess of £100 million, according to a source close to the company. 

The deal will be backed by £560 million of debt, with the financing package led by Nomura. Mezzanine accounts for £180 million of that total, according the source.

The acquisition is viewed as a strategic move from Hellman & Friedman as they have expertise in the energy and data sectors, including investments in power generation company Texas Genco and the media conglomerate The Nielsen Company, added the source.

“Wood Mackenzie and its employee owners are a perfect fit with the investment focus we have at H&F of investing in high growth, mission critical information service businesses,” said Patrick Healy, deputy chief executive of Hellman & Friedman, in a statement.  

Wood Mackenzie’s management team and staff also received a bumper pay day and will retain a 24 percent stake in the company, sharing a £90 million windfall.

The deal is expected to complete by the end of August.