Primary Capital rolls a 3.2x rail exit

The £50m sale of Amber Travel to buyout peer ECI is the second successful realisation of the year for the firm.

Lower mid-market buyout firm Primary Capital has sold Amber Travel to fellow UK investor ECI Partners in a deal valuing the travel agent at £50 million (€59 million, $75 million). 

This exit will generate a 3.2x return on investment for Primary Capital, according to a statement. Primary originally invested in the company in 2005. 

Based in York, Amber Travel is the largest UK rail tour operator, offering group travel and holiday packages to destinations around the world. Founded in 1980, the business generated £67 million in the year to 30th September 2012. 

Primary Capital and ECI believe the business is growing strongly, with an anticipated turnover growth of 20 percent this year. “Amber has quite a unique offering in that it offers escorted rail tours. This gives the company a fantastic access to great demographics: the typical customers are 55 to 75 year-old, which is a growing part of the population that has got money,” Steve Tudge, managing partner at ECI, told Private Equity International. 

ECI plans to develop the company mostly through organic growth, Tudge said. “Great Rail Journeys, the premium brand, is well established but still growing; and over the last three years they’ve developed a lower price point brand called Treyn, which is on a much higher growth trajectory. So there’s plenty of growth opportunities for the business.”

ECI is not new to the travel sector, having invested in Reed & MacKay, a corporate travel management business, and CarTrawler, an online car rental integrator, in 2011. 

The firm is currently investing from its Fund IX, which closed on £437 million in 2008. 

ECI’s latest investment will allow Primary Capital to seal its second lucrative exit this year. Last January, the firm reaped a 5.5x return through the sale of Napier Turbochargers, a manufacturer of turbochargers for the marine and power industries, to US group Wabtec Corporation. 

Primary Capital’s latest fund, Primary Capital III, closed on £200 million in 2006. The firm currently has around £360 million under management.