Past experience has demonstrated that the performance of theme park operators can be something of a roller-coaster ride, so Palamon Capital Partners will be hoping its latest investment avoids going into freefall. The London-based pan-European mid-market investor has bought the European division of Six Flags, a US-based theme park business, for €155 million ($185 million).
Palamon is not the first thrill-seeker from the private equity ranks. Cinven and Mercapital floated Spanish leisure group Parques Reunidos, which runs water and safari parks, on the Madrid Stock Exchange in 1999.
The firm saw its shares fall to less than half their issue price by the end of 2002, before bid interest from US private equity firm Advent International aided their revival. Advent eventually acquired the firm towards the end of last year for €165 million in Spain's first public-to-private buyout.
The investment in Six Flags, which was Palamon's largest to date, was made from its first fund, Palamon European Equity LP, a €440 million vehicle that was closed in August 1999.
The deal means the fund is now approximately 75 percent committed. Miles Cresswell-Turner, partner at Palamon, said that the firm was in “active discussions” about raising new money and that a second fund would likely be launched in the second half of this year.
BRIDGEPOINT SECURES PRISON DEAL
Currently investing from its second fund, Bridgepoint Europe Private Equity Fund II, the UK-based midmarket private equity firm has been granted exclusivity in negotiations to buy Global Solutions, the prison management unit of Group 4 Falck. The Danish security company is being divested as part of the merger between Group 4 Falck and Securicor for a reported £200m (€300 million; $370 million). Bridgepoint was the preferred bidder and is now in exclusive negotiations with Group 4 Falck. Bridgepoint's second fund closed in May 2002 on €2 billion ($2.4 billion) and is understood to be currently approximately 40 percent invested.
3I FOLLOWS YELLOW BRICK ROAD AND SELLS STAKE IN ELC
3i, the UK-based venture capital and buyout firm and VS & A Communications Partners III LP, the private equity fund of media merchant bank Veronis Suhler Stevenson (VSS) have consolidated their three European telephone directories businesses. The new group, Yellow Brick Road is the first major pan-European directories consolidation and will comprise leading directories companies in markets in Finland, the Netherlands and Central Europe. 3i and VSS initially invested a total of €280 million ($340 million) in the three businesses and it is understood that the new group will generate earnings in the current year of approximately €160 million.
Meanwhile, 3i announced it will sell retail outlet Early Learning Centre (ELC) to entrepreneur Tim Waterstone for £62 million (€93 million; $111 million) in a deal backed by publisher DC Thompson, private equity firm Rhone Capital and Bank of Scotland. Waterstone said he intends to merge ELC with his loss-making children's clothing chain Daisy & Tom. 3i backed the £30 million management buyout of ELC from John Menzies in September 2001.
IRISH MAGNATE SNAPS UP SAVOY GROUP
The sale of the Savoy luxury hotel group by Blackstone Group and Colony Capital to a syndicate of wealthy Irish investors led by Derek Quinlan has been agreed. The deal, reported to be worth around £750 million (€1.1 billion; $1.4 billion), is expected to complete later this month. Blackstone and Colony, both US private equity firms, acquired Savoy for £520 million in 1998 in a deal that included £365 million of debt. They subsequently spent £55 million renovating Claridge's, the most valuable hotel in the group.
ELECTRA FINDS INGREDIENTS FOR €270M LBO
Electra Partners Europe, the European mid-market buyout firm, has invested €270 million ($333 million) in Diana Ingredients, a supplier of natural ingredients to the food and pharmaceutical industries. The buyout was the 11th investment made from the Electra European Fund LP, which closed in April 2001. Following the completion of the Diana deal, the €1 billion fund is understood to be 70 percent invested. Paris-based director, Patrick Eisenchteter, stated that new fundraising was “definitely something in our minds for early 2005”. Investors in the current fund include Abbey National, General Electric Pension Fund, Hamilton Lane Advisors (the New York State Common Retirement Fund and others), Morley Fund Management, Swiss Re and Yale University. The Diana Ingredients deal is the second transaction for Electra in three months, following the €205 million MBO of Aliplast, the Belgian conservatory supplier, in January.
PE FIRMS SELL UNIQUE PUB STAKE FOR £609M
A private equity consortium led by Cinven has sold pub operator Unique Pub Company to Enterprise Inns, one of the UK's largest pub chains, in a transaction valued at approximately £609 million (€912 million; $1.1 billion). Enterprise acquired the 83.2 percent equity stake from a Cinven-led group of investors that also included Morgan Stanley's Princes Gate Investors and Legal and General Ventures (LGV). Enterprise had made a £75 million (€108 million; $137 million) cash investment in the initial £2.013 billion acquisition of Unique by the consortium. Cinven contributed £235 million of equity with LGV and Princes Gate investing £60 million and £77 million respectively.
ACCENT CLAIMS 30 PERCENT RETURN FROM TRIBON SALE
Tribon Solutions, a Swedish niche software group, has been sold by private equity firm Accent Equity Partners to Aveva Group, a UK-based engineering software and services group in a £19 million deal (€28 million; $34 million), delivering a reported 30 percent IRR. Accent acquired Tribon in July 2002 from Sweden's Sixth National Pension Fund (AP6) for a reported SEK140 million (€15 million; $18 million). Accent has retained a four percent interest in the combined Aveva/Tribon group, making it one of the company's ten largest shareholders. Accent has achieved ten exits from portfolio companies since January 2003, the most recent being the divestment of Hornell, a supplier of protective equipment, to 3M at a stated capital gain multiple of 13.6 times cost. Accent is currently raising its seventh fund, Accent Equity 2003, and i s expecting to raisea total of €200 million from mainly European-based investors by the end of July 2004.