LDC books 3x on Angel Springs

The water cooler business was the second acquisition for Germany’s Castik Capital

LDC, the UK-based private equity arm of Lloyds Banking Group, has sold its stake in water cooler business Angel Springs to Germany-based private equity firm Castik Capital, founded earlier this year by former Apax Partners equity partner Michael Phillips.

Financial details of the transaction were not disclosed, but LDC said in a statement that the transaction delivered an “excellent return” for the firm, generating a money multiple of 3x.

LDC declined to comment further on financial details.

Angel Springs provides bottled and mains-fed water coolers to businesses and organisations in the UK, and currently services more than 60,000 water coolers, according to LDC. The company has a network of 10 regional service and distribution centres.

The firm invested in the Wolverhampton-headquartered Angel Springs in 2011, acquiring a “significant majority stake”, LDC said. During the investment period, the company secured new contracts with both SMEs and blue chip organisations, and completed nine strategic acquisitions.

During LDC’s three year ownership the company’s turnover rose from around £14 million (€18 million; $22 million) to around £20 million (€25 million; $31 million) for the financial year ended March 2014. Employee numbers also rose from 131 people at the beginning of 2011 to more than 200 people today.

Angel Springs is Castik’s second acquisition. In November the firm offered 151 pence per share to take AIM-listed Waterlogic private in a deal valuing the company at £122.6 million (€155 million; $193 million).

“The acquisition of Angel Springs is a material building block in our strategy to form a globally leading water cooler company,” Castik founder Phillips said. “Angel Springs has exhibited impressive growth over recent years – both organically and through acquisitions – and has a highly experienced management team.”

Castik’s investments are made by the Luxembourg-based fund EPIC I SLP, which is managed by Castik and held a first close on €625 million in June 2014. The vehicle is targeting a final fund close of €1 billion, according to the firm.

For LDC, the exit serves as its twelfth this year. Last week the firm booked 2.8x on its investment in NRS Healthcare, a healthcare services and equipment business that works closely with the National Health Service and local authorities. In November the firm listed drinks company Fever-Tree on AIM, which was set to raise gross proceeds of around £93.3 million (€118 million; $147 million), and booked 4x in June on its sale of internet service provider Metronet to Living Bridge, formerly known as ISIS Private Equity.