This summer, John Caudwell became a cash billionaire. According to newspaper reports, he marked the occasion by going on a 75-mile bicycle ride followed by lunch with his mother.
Fitness fanatic Caudwell had ample reason to celebrate: private equity groups Providence Equity Partners and Doughty Hanson had just agreed to buy the Caudwell Group, the large UK mobile telephony business that the 53 year-old had built from scratch, for a whopping £1.46 billion (€2.14 billion; $2.74 billion). Caudwell, who founded the group in 1987 along with his brother, had an 85 percent stake in the business.
Back in the 80s, the former garage owner and car sales man understood better than most what mobile phones would do to telephony. According to Forbes Magazine, he sold just 26 phones from his first store in the town of Stoke-on-Trent in the Midlands. By the time he cashed out, the company was turning over billions.
Under the deal, Providence is buying Caudwell's mobile phone retail chain Phones4U. Doughty Hanson will be the new owner of 20:20 Logistics Distribution, a handset distributor, which will be renamed 20-20 Mobile. The two firms agreed to pay about 9x EBIT for the assets.
When he put his company up for sale in November 2005, Caudwell refused to contemplate offers from strategic investors. The best way to protect the company's 8,500 employees, he said, would be to sell to a private equity sponsor intent on growing the business. With Providence and Doughty now taking over, Caudwell will get the chance to see whether this thesis was indeed correct.
He is of course more often right than wrong. Analysts had initially expected the Caudwell Group to fetch around £800 million, but Caudwell had always insisted that the business was worth considerably more than that.
The self-made man, who now ranks among Britain's 30 richest people, was also right in predicting that he would do well in life. In a recent interview with the BBC, Caudwell was quoted as saying: “I did imagine becoming a millionaire when I was seven years old. I always had a passionate belief in my ability to succeed at anything I did.”
Good for him. It takes many things to become a billionaire, and confidence is definitely one of them.
CROSBY BECOMES BRIDGEPOINT ADVISER
Sir James Crosby, the former chief executive of HBOS, has joined private equity firm Bridgepoint's advisory committee. He started his career at Scottish Amicable, where he spent 10 years as a fund manager followed by senior positions in marketing, IT, finance and corporate development. In 1994, he became managing director of Halifax Life, an insurance subsidiary. After a 1996 merger with Clerical Medical, an insurance business, Crosby became financial services and insurance director of Halifax before becoming chief executive in 1999. In September 2001, following the merger of Bank of Scotland and Halifax, Crosby took on the position of chief executive of HBOS.
APAX HEAVYWEIGHTS TO LAUNCH FUND
Toby Wyles, formerly one of the global equity partners at the top of buyout firm Apax Partners, has launched midmarket firm Vitruvian Partners. Wyles, 45, who was with Apax for 13 years and co-head of its European leveraged team when he left in 2003, has recruited Michael Risman, also a global equity partner at Apax until October last year, and Ian Riley, 43, a senior partner with rival firm BC Partners until he left in August 2003. Risman and Riley will be managing partners alongside Wyles. David Nahama, a partner at Apax investing in venture deals and part of that firm's technology and telco team, is joining Vitruvian as a partner. Mark Hartford, until 18 months ago chief financial officer at Bridgepoint, is the final partner in the starting line-up.
LOVELLS MAKES TWO HIRES FOR LONDON
Lovells, an international law firm, has appointed private equity lawyers Tom Whelan and Stephanie Keen as it rebuilds its London practice following the departure of private equity head Marco Compagnoni to Weil, Gotshal & Manges in February. Whelan will join Lovells from the London office of DLA Piper Rudnick Gray Cary, where is currently a partner. Keen comes to Lovells from Fried Frank Harris Shriver & Jacobson's London office, where she is a senior associate. Rival international law firm Kirkland & Ellis has hired Sam Pakbaz in its corporate practice in London, where he will advise clients on leveraged buyout transactions, fund formations, mergers and acquisitions and disposals.
RIMER BROTHER LEAVES INDEX
Richard Rimer has left Index Ventures, where he was a partner in the firm's Geneva office, to launch his own business focused on medical devices or med tech. Rimer joined Index to work with two of his brothers David and Neil in 2001 from MediService, a start-up he co-founded and built into Europe's largest mail-order pharmacy. His third brother Danny joined a year later.
CD&R STRENGTHENS LONDON TEAM
Clayton, Dubilier & Rice has appointed Marco Herbst, formerly of Duke Street Capital, a UK mid-market private equity firm, as a senior principal in its London office. At Duke Street, Herbst was an investment director responsible for transaction origination and execution. Before that he was an investment banker at Merrill Lynch's office in London, where he specialised in the financial services sector, advising on European acquisitions and debt and equity transactions.
COGENT PARTNERS GROWS TEAM
Bernhard Engelien has joined Cogent Partners, a private equity secondary advisor, as a director. He will be based in London and focus on advising limited partners in the UK and continental Europe. Before Cogent Partners Engelien was at McKinsey & Company, where he was an associate principal advising financial services companies and private equity firms on a broad range of strategy and corporate finance topics in the UK, continental Europe and the Middle East. Engelien started his career at Goldman Sachs in London.