News: Deals

Nomura exits pub chains
Nomura International has announced that it has sold its Voyager and Unique pub chains (Newco) to a consortium led by Cinven in a £2.013bn transaction. The pub estate acquired consists of 4,189 pubs and is estimated to generate a full year EBITDA in excess of £220m. The deal will also see UK-listed Enterprise Inns make a £75m cash investment in the acquisition and will be granted a call option to purchase the remaining equity of Newco. Enterprise Inns will receive a 16.8 per cent stake for its investment. The consortium of private equity investors which subscribed for the remainder of the equity in Newco was led by Cinven (who subscribed £235m in equity) and included Morgan Stanley's Princes Gate Investors (£77m) and Legal & General Ventures (£60m). Dick Davison, director at Cinven said: ?We already had a good working relationship with Nomura as a result of the acquisition of William Hill in 1999 so we were able to proceed with the deal at a healthy pace. Both parties agreed that £2bn was a fair price for the companies.? Newco is being financed by equity of £447m with the balance in debt, which includes £1bn in the form of Unique's existing securitised debt.

Carlyle completes Le Figaro sale
Carlyle has reached an agreement with Socpresse to dispose of its 40 per cent stake in French daily Le Figaro. On completion of the deal, Socpresse will take 100 per cent control of the French newspaper. Carlyle's €1bn European buyout fund was used to acquire the stake in Le Figaro Group from Socpresse in July 1999 through a combination of shares and convertible bonds, which valued the stake at around €500m. This was Carlyle's second buyout investment in France and the firm's third buyout in Europe. A spokesperson for the private equity firm confirmed that the investment had yielded a good return as well as providing Le Figaro with strong foundations for future development. ?At the time of our original purchase, the owners of Le Figaro were keen to combine an injection of capital into the business with apolitical management advice. The past three years have seen a restructuring of the paper, both in terms of the balance sheet and the newspaper's style.? Socpresse is part Groupe Hersant, a holding company that is 70 per cent owned by the Hersant family and 30 per cent by Serge Dassault, who reportedly paid €340m for his stake in the company in February this year.

Galbani goes to BC Partners
BC Partners has acquired the Italian cheese and cured meat operations of Groupe Danone in one of the largest LBOs seen in Italy. The buyout group has paid €1.015bn for Galbani, which had a turnover of €1.1bn in FY 2001. The transaction, which is subject to European antitrust authorities approval, will not generate any capital loss in 2002 for Danone. The food group's 2001 financial results released in January had already built in a €450m capital loss to account for the Galbani sale. Included in the deal is a €207m vendor loan note from Danone (see more on these in this issue's Deal Mechanic), hence reducing the amount of equity contributed by BC Partners. JP Morgan Chase is providing BC Partners with an undisclosed amount of debt finance. Deutsche Bank is co-advising BC Partners, alongside BNP Paribas, on the acquisition. In Italy, the BC Partners Fund has already carried out investments in companies including Brembo, Zucchini, Interpump, Buffetti and Seat.

LGV, RPBE buy Moliflor from PPM
UK-based private equity firms Legal & General Ventures (LGV) and Royal Bank Private Equity (RBPE) have won the race to acquire French casino operator Moliflor Loisirs from its existing shareholder, PPM Ventures, for a price in excess of €400m. The pair clinched the deal amid competition from other financial buyers including Candover and CVC Capital Partners. PPM Ventures acquired the casino operator in June 1999 for around €80m. On completion of the transaction, LGV funds will hold 50.1 per cent of the equity, RBPE 48.2 per cent and Moliflor's management will hold the balance of 1.7 per cent. The French casino market is the largest in Europe with 170 casinos accounting for €2.3bn in gross gaming revenues in 2000. ?We believe there is considerable scope for consolidation in the casino market and we intend to play an integral role in this,? explained Adrian Johnson, chief executive at LGV. This investment represents LGV's third buy and build investment in France and fifth French deal since it started investing in France in 1997. For RBPE, it is the second investment in the French market; the first was completed in June 2001 with the purchase of Metaux Speciaux SA.

US private equity firm acquires German shipyard
One Equity Partners has acquired a 75 per cent stake less one share in German shipyard Howaldtswerke Deutsche Werft (HDW), the world's leading maker of non-nuclear submarines. One Equity bought the shares from debt-laden engineering group Babcock Borsig, tourism giant Preussag and financial investor BayernFinanz. Babcock sold half of its 50 per cent stake plus one share; Preussag sold its remaining 30 per cent stake; and BayernFinanz sold a 20 per cent stake less one share. The purchase price was not disclosed but was likely to be in the region of €600m, according to industry insiders. HDW rivals ThyssenKrupp Industries and Ferrostaal have been offered a 15 per cent stake each in HDW by One Equity. The terms of the deal agreed by the private equity firm stipulate that One Equity cannot sell further shares in HDW for two years, with the other shareholders holding pre-emptive rights in the three years after that.

Carlyle Group leads €20m Opto Speed investment
The Carlyle Group has announced that it is to lead a €20m second round of financing for Switzerland-based opto-electronic components manufacturer Opto Speed. A spokesperson for the global private equity and VC firm said that it was currently in the process of recruiting further strategic backers for the investment- a process that it expects to complete by the middle of May. The investment came from the €730m Carlyle Europe Venture Partners (CEVP) fund that focuses on investing in European companies developing core infrastructure technologies and services in the material sciences, communications technologies, communications services, enterprise and infrastructure software and online financial services sectors.

EQT Partners buys Lillbacka
EQT Partners has completed the acquisition of Finland's Lillbacka Corporation, the sheet metal manufacturing systems supplier using its EQT Northern Europe fund. The company has been sold by Jorma Lillbacka, who founded the company 30 years ago. Lillbacka will join the board of directors and will advise the company management. The purchase price for the company, which has locations in Finland, Belgium, Italy, and the US, has not been disclosed. The group is expected to generate revenues of around €190m in 2002.

Candover exits RIM
Candover Investments, the UK-based provider of equity for European buyouts, has announced the disposal of its northern media group, Regional Independent Media (RIM), for £560m. Candover led the acquisition of UPN Holdings Limited, the northern newspaper interests of United News & Media Plc, subsequently renamed RIM, in 1998, paying £360m for the business. RIM has a portfolio of 53 titles and its turnover in the year to 31 December 2001 was £175.3m. This is the fourth realisation for the Candover 1997 Fund.

Baring leads scaffolding MBO
Baring European Private Equity has announced the completion of a leveraged MBO of France's leading scaffolding companies, Entrepose Echafaudages and Mills. The two companies were acquired from Tractebel, the energy division of Suez, for an undisclosed sum. Turnover for the companies in 2001 was around €80.6m, giving the combined group a market share of 20 per cent in France. BPEP invested alongside TCR Industrial Managers, the French private equity firm.

GE Capital acquires PII Group
Hg Capital has announced that it has completed the sale of PII Group Ltd (PII), a pipeline integrity services company, to GE Power Systems, for £310m. Hg Capital confirmed that the deal represented a fourfold increase on the original investment. In 1999, PII acquired Pipetronix for £232m with Candover contributing £16.7m. PII has since increased turnover to over £115m with operations in over 45 countries worldwide.

Industri Kapital acquires Labeyrie stake
Financière de Kiel, an acquisition vehicle controlled by Industri Kapital's 2000 Fund, has acquired a 67 per cent stake in Labeyrie Group, the listed French food producer. Financière de Kiel will pay €71 per share through the purchase of shares from Suez Industrie's subsidiary Européenne de Gastronomie and Labeyrie's directors, giving the deal a value of approximately €115m. Labeyrie is the third company in France to be acquired Industri Kapital, following investments in Fives-Lille in 2001 and Laho Equipement in 2000.

Mercapital backs textiles merger
Mercapital, the Spanish private equity firm, has invested €40m in Spain's leading interior decoration company, KA Group. KA Group is a newly-merged entity, formed by the merger of KA International, a Spanish retail chain of textile fabrics and home furnishing, and CRH, a hotel decoration specialist. Following the €40m investment, Mercapital will have a 45 per cent stake in KA Group.

CapVest completes Young's Bluecrest MBO
Legal & General Ventures (LGV) has sold its stake in Young's Bluecrest to a company controlled by funds advised by CapVest Limited and the management of Young's Bluecrest. The total value of the deal is £137m, with CapVest reportedly taking a 79 per cent stake in the firm. Young's Bluecrest is the largest processor of frozen seafood in the UK with a turnover of approximately £320m. The company was formed in July 1999 from the merger of Bluecrest Seafood Limited, and Young's.

CHOICE MBO for Sovereign
Sovereign Capital has invested £8.7m investment in an MBO at Community Homes of Intensive Care and Education (CHOICE). The investment is the first to come from the Sovereign Capital Limited Partnership III (SCLP III) fund which is expected to close imminently, having already received commitments in excess of £100m, the fund's original target. Sovereign's previous investments in the healthcare sector include Care UK plc, Speciality Care, Craegmoor Healthcare, CVS and Ambic.