LGV leads Jeyes MBO

The UK private equity firm has teamed up with management to acquire the household products division of IWP International.

Legal & General Ventures, the UK private equity firm, has formed a joint venture with IWP International to acquire IWP’s household products division through a management buyout.

The new business, Jeyes Group Ltd, produces household cleaning products with a market share in the UK of around 15 per cent. The firm is being acquired debt-free in a transaction that values the business at E134.2m. For the year ended 31 March, Jeyes achieved operating profit of E16m on sales of just under E300m.

The deal sees IWP retain a 35 per cent stake in the firm, with LGV and the management team, led by chief executive Mike Colley, acquiring 44 and 21 per cent stakes respectively.

IWP confirmed to the London Stock Exchange this morning that the value of its retained 35 per cent stake was E33.2m, adding that Jeyes Group will be financed by way of E2m of ordinary share capital, E62m of bonds and E85m of bank debt, provided by Bank of Scotland, Barclays and Scotiabank.

Ivan Heywood, managing director of LGV, said the acquisition continued the firm’s trend of investing in strong consumer products companies. “[Jeyes] is a consumer products business combining own label, third party and branded goods. He added that the strategy for the company was to focus on brand building and new product development.”

The deal is LGV’s third large transaction in 2002. The firm acquired French casino operator Moliflor Loisirs for a price in excess of E400m in March, a month which also saw the completion alongside Cinven Group and Princes Gate Investors of the E3.2bn acquisition of the Unique and Voyager pub chains. Recent exits for the firm include the sale of Young’s Bluecrest, Santé Finance and Espace Verts.