Permira has sold its remaining 5.9 percent stake in Macau-based casino and hotel operator Galaxy Entertainment Holdings in a deal worth $870 million.
The firm's third partial exit brought “well over 3.5x” returns, according to a source close to the matter. Permira is understood to have recored an overall return multiple of approximately 2.8x from the total investment.
Permira previously sold partial stakes in Galaxy in September 2011 and August 2012 in deals worth $613 million and $755 million respectively. A source close to the matter said each of the first two exits brought the firm an approximate 2x return.
Completion of the final sale is expected on 12 November, according to an announcement from the Hong Kong Stock Exchange.
Permira paid €593 million for a 20 percent stake in Galaxy in November 2007, marking the firm’s first investment in Asia since opening its Tokyo office in 2005.
Macau’s gaming industry has grown significantly since Permira's initial investment, but the firm's co-head of Asia, Henry Chen, believes private equity will not have a further role to play because casinos have become increasingly cash-rich.
Early in 2011, the European firm moved partner Alex Emery from Tokyo to Hong Kong to become co-head of Asia with Henry Chen, signalling an increased focus on China.
However, in August, the firm secured a rare Japan buyout, acquiring 100 percent of Japan-based sushi chain Akindo Sushiro for $1 billion, sister publication PE Asia reported earlier. The investment was made using capital from Permira IV, which is now about 90 percent deployed and has fully realised four of its investments. The buyout firm is currently raising its fifth fund with a target of €6.5 billion.