MidOcean Partners, the private equity business set up to acquire Deutsche Bank's late stage private equity investments earlier this year, has made a further exit from the E1.5bn portfolio it acquired in February. The firm announced today that the UK operations of Center Parcs for £285m.
The sale of Center Parcs UK brings MidOcean’s overall return on the UK business to approximately five times MidOcean's original investment. Center Parcs UK and Center Parcs Europe were acquired by DB Capital Partners (now MidOcean) for £700m from Scottish & Newcastle in 2001. In November 2002, Center Parcs UK completed the sale and leaseback of its parks for £460m.
MidOcean has sold the business to Arbor plc, an acquisition vehicle set up by Collins Stewart, the UK stock broker, that will be listed on the Alternative Investment Market in a fully underwritten offer by Collins Stewart. Arbor will be renamed Center Parcs UK Group plc when it lists next Thursday.
Center Parcs UK has approximately 3,100 villas and apartments at four centres across the UK employing 4,000 full and part-time staff. For the year to April 30 2003, the business generated sales of £160.7m and an EBITDA of £35.3m. Chairman Martin Robinson and chief executive Martin Dalby will continue to head the group.
Arbor funded the purchase of Center Parcs UK by raising £245m via a share placing at 100 pence per share. The remainder of the price will be made up by loan notes issued to MidOcean.
The deal has a similar structure to the E3.2bn Northumbrian Water deal earlier this year. Collins Stewart was part of a consortium of institutional investors that bought the water company and floated the business on AIM in May.
In August, MidOcean Partners, which was formed by the managers of DB Capital Partners, the German bank’s private equity business, announced it had sold its 50 per cent stake in European unit of Center Parcs for E270m to Pierre & Vacances, which already controlled the other 50 per cent stake in the company. Center Parcs Europe operates 15 ‘holiday villages’ in France, the Netherlands, Belgium and Germany. The company had revenue of E525.6m in the 2001/2002 fiscal year.
In June, Investcorp and MidOcean sold education memorabilia company Jostens to CSFB Private Equity for approximately $1.2bn.
Graham Clempson, European managing partner of MidOcean, said the sale was 'a great outcome for the company and [MidOcean's] investors. The IPO of Center Parcs reflects the success of management and our team in improving operating performance and capital efficiency in this unique business.”
Merrill Lynch advised MidOcean on the sale.