Mid-market firms MidOcean Partners and Wasserstein are realising 3.5x and 4.2x cash-on-cash multiples on their sale of business tools and data analytics provider Penton to Informa for $1.56 billion, according to people familiar with the matter.
The sale price reflecting $1.46 billion of cash and $100 million of Informa stock, a statement said.
A source familiar with the matter told Private Equity International Wasserstein, which entered the investment first and brought MidOcean into the co-ownership, is realising a 4.2x cash-on-cash multiple and a 33 percent internal rate of return. The person added that the returns for Wasserstein and MidOcean differ because they entered the investment at different times: Wasserstein originally invested in New York-based Penton, and brought MidOcean into co-ownership.
New York-based Wasserstein, which launched in 2001 as a spinout from merchant bank Wasserstein Perella & Co., originally acquired Penton in November 2006 for $530 million, according to reports. In 2007, MidOcean Partners entered co-ownership with Wasserstein, with the former acquiring a majority 50 percent interest in Penton.
Another person told PEI MidOcean had invested in Penton out of its third fund, MidOcean Partners III, which closed on its target of $1.25 billion in 2007.
PEI data indicates that investors in this fund include the Milken Family Foundation, the University of Missouri System, New York City Police Pension Fund, and Partners Group. According to a document from the NYC Police Pension Fund, MidOcean Partners III was generating an investment-to-date internal rate of return of 8.51 percent, as of March 2015.
MidOcean’s private equity funds invest minimum $25 million of equity in business and media services, consumer, and industrial services companies in North America and Western Europe. According to PEI data, MidOcean Partners IV launched in 2015 targeting $300 million. MidOcean manages $3.5 billion in assets, according to PEI data.
Wasserstein targets companies in the media and communications, consumer products, and water and industrial sectors generating earnings before interest, tax, depreciation, and amortisation between $10 million and $50 million, according to its website. It makes between $50 million and $200 million in equity per transaction.
In August 2015, Wasserstein launched its fourth fund, Wasserstein Partners IV, targeting $750 million, as reported by PEI. Wasserstein manages $1.05 billion, according to PEI data.
Under the ownership of MidOcean and Wasserstein, Penton almost doubled its EBITDA from $77 million to $140 million, the statement said. It also transformed from a print business to a provider of data analytics, mobile applications, and sector-focused conference events, through 13 add-on acquisitions, new product launches, and improvement of its main products. Its current product offering includes Aircraft Bluebook, which reports on the aircraft market, and Farm Futures mobile application that provides news on agriculture.
This transaction is expected to close in the fourth quarter.
Penton and MidOcean received legal advising from Kirkland & Ellis. Wasserstein received legal advising from Jones Day.