Patron Capital, the UK private equity and real estate investor, has made its latest acquisition in Europe backing the management buyout of Simon Storage, the UK storage division of port and logistics company Simon Group for £63.9m.
As part of the deal, Patron will also fund the £24m purchase of a 49.9 per cent stake in Chemicals Oil and Storage Management from Vopak, the current joint owner of Chemicals Oil alongside Simon, which already controlls 51.1 per cent of the shares. The total consideration for the two assets is £88m.
Bear Stearns International is providing acquisition finance for the deal. Debt will be refinanced in the securitisation market. Debt and equity proportions have not been disclosed.
Simon Storage is an independent UK bulk liquids and gases terminal operator and manager providing specialist storage handing and transport for bulk liquids. The firm reported profits of £1.9m and net assets of £43.9m in the six months to June 30, 2002.
Keith Breslauer, managing director at Patron Capital and a former head of Lehman Brothers' principal finance unit, said the firm first became interested in Simon Storage two years ago prior to making two friendly approaches, at 65p and 75p a share respectively, in December 2000. Both offers were rejected. Simon was then forced to put itself up for sale in January 2002 after pressure from a group of shareholder activists, led by JO Hambro, which had built up a 12 per cent stake in the company. No other offers were made.
Commenting on the Patron’s plans for the firm going forward, Breslauer said: “We intend to invest further in Simon to ensure that it continues to be the leading UK storage operation. We are currently in the process of looking at some add-on acquisitions.”
Patron Capital, established in 1999, invests in property, property-related companies or companies with significant property assets throughout Western Europe. To date, the firm has invested in properties and assets over $2bn.
Commerzbank Securities advised Patron on the transaction. Legal advice was provided by TaylorWessing. The sale is conditional on approval of the company’s shareholders.