Pan European private equity firm Industri Kapital (IK) has sold a further batch of shares in portfolio company Alfa Laval, the Swedish fluid control systems maker.
The Industri Kapital 2000 Fund has sold 10,500,000 Alfa Laval shares to a range of Swedish and international institutional investors for a total of €125 million (at SEK111 per share), in the process reducing its stake in the business from 17.9 percent to 8.5 percent. A source close to the share sale, which was handled by Credit Suisse First Boston and Enskilda Securities, said it was two times oversubscribed.
Last October, IK notified its limited partners that it had sold 10,000,000 Alfa Laval shares at SEK100 each, generating proceeds of €109 million. At the time, investors were told the investment was on course for a money multiple of 1.8 times and an IRR of 24 percent, but the latest transaction suggests this may be exceeded.
IK originally invested €280 million in the buyout of Alfa Laval from Tetra Laval in June 2000 and the deal has so far delivered total proceeds of €406 million. A source close to IK said the firm’s remaining stake in Alfa Laval, which listed in Stockholm last year, is valued by the latest transaction at around €115 million.
The share sales are a logical move for IK, which does not wish to hold listed shares in the long term and has taken advantage of strong stock market conditions to achieve a staged exit. IK held a first closing of its latest fund, IK 2003, at €500 million in 2003 and is aiming for a final closing this year.
News of the successful ongoing exit from Alfa Laval will be greeted favourably by wavering potential investors. They would also have taken encouragement from the March 2004 IPO of Oriflame Cosmetics, in which IK made a reported sixfold return on its orginal investment of €90 million in the business in 1999.