Industri Kapital cements first French exit

Industri Kapital has reportedly realised double its investment in the €300m secondary sale of French industrial engineering company Groupe Fives-Lille to BPE.

Pan-European private equity house Industri Kapital has sold its controlling stake in Groupe Fives-Lille (GFL) to Barclays Private Equity France and management.

The sale of the French industrial engineering group, which specialises in producing equipment for the aluminium, automotive, steel and cement industries, was understood to be in the region of €300 million ($366 million). In 2003, GFL recorded sales of more than €700 million.

The firm has advised its investors that the sale generated total proceeds for IK of approximately €160 million. IK also received €47 million when GFL was recapitalised in July 2003. In a note to investors, the firm advised that the total proceeds of €207 million represented a money multiple of 2.1x cost, yielding a gross IRR of 23 percent on IK's initial €100 million investment.

The investment was made from Industri Kapital's IK2000 Fund, which has now realised €638 million in proceeds, representing over 37 percent of the fund's invested capital of approximately €1.7 billion.

IK acquired a controlling stake in GFL when the company was taken private from the Paris stock exchange in February 2001. Commenting on the transaction in a statement, Christopher Masek, director of IK said: “GFL is IK’s first realisation in the French market and demonstrates IK’s ability to generate superior returns on a pan-European basis.”

The Stockholm-headquartered firm also has current French investments in Labeyrie, a specialist in smoked salmon and foie gras production, acquired in March 2002 and CEVA Santé Animale, an animal health products manufacturer that was acquired from PAI Partners in September 2003.

The GFL deal is the latest in a series of exits for IK as it continues its latest round of fundraising for IK2003, which held a first closing on €500 million last October. According to a source, following a successful investor conference in June, the firm is aiming for a final close in autumn this year.

With the GFL deal, IK has returned in excess of €1.1 billion to investors since the start of 2003, following high profile exits from Swedish cosmetics company Oriflame, fluid control systems manufacturer Alfa Laval and Nobia, the Swedish kitchen manufacturer.