Listed German buyout group Aurelius had a busy week at the end of July, exiting steelmaker KWE and making two further investments, including a majority stake in the venerable German drinks producer Berentzen.
Although the value of the Berentzen deal was not disclosed, it was confirmed by a source as Aurelius' largestever transaction.
Aurelius, which invests in corporate spin-offs and distressed assets in Germany, bought a 75 percent stake in the company from various stakeholders, including the Berentzen family.
With a 250-year history, Berentzen is a well-established player in the German drinks market. It has a stable of around 60 alcoholic drink brands, including Puschkin Vodka, Bommerlunder, Linie Aquavit and the core brand Berentzen.
In 2007, the company recorded gross revenues of €433 million ($677 million), but an operating loss of €11 million. Ingo Middelmenne, head of investor relations for Aurelius, told PEI how the firm intends to return the company to profitability within the next 12 months.
“Up until now, Berentzen has really concentrated all its marketing efforts on one core brand, Berentzen,” said Middelmenne. “We intend to increase the investment in marketing and widen the focus to include between five and eight of Berentzen's classic spirit brands.”
These brands include the likes of Bommerlunder, immortalised among German drinkers in the traditional drinking song Eisgekühlter Bommerlunder.
As well as Aurelius' intention to inject more money into marketing, the firm is looking to increase Berentzen's global footprint, with the US market high on the company's agenda.
“Aside from being a huge market in itself, the US market is also a global trendsetter,” said Middelmenne. “Just look at what happened to Jägermeister: before being adopted by the US market, it was really only known in Germany. Now it is a global brand.”
One element of the Berentzen portfolio worth keeping an eye on is the group's non-alcoholic offering: a flavoured health drink named Vivaris and the license to distribute Pepsi in Germany, which together contribute around €50 million to the company's net revenues. As Aurelius refreshes the Berentzen stable, will it look to divest any non-core brands? “I can't comment on that at this stage,” said Middelmenne.
BNP UNIT SELLS PORTFOLIOS THROUGH SECONDARY
BNP Paribas Private Equity, the private equity arm of BNP Paribas, has sold all or parts of the underlying shareholdings owned by the vehicles it manages. Venture funds Antin FCPI 1 and Antin FCPI 2 will be closed and capital plus gains returned to investors. BNP Paribas Private Equity was advised by specialist secondary advisors RainMakers Private Equity and the French M&A boutique, Optiva Capital. Brice Lionnet from BNP Paribas Private Equity said in a statement: “This is a win/win transaction where we were able to sell our assets at a satisfactory price level. The secondary sale of direct assets is a very complex transaction, which has to deal with several layers of liquidation preference, rights of first refusal, tagalongs and drag-alongs among other difficulties.” BNP Paribas Private Equity was created in 1998, mainly from the investment department of Banexi, BNP's former investment banking arm. In total, BNP Paribas Private Equity and its affiliates have launched around 20 funds since 1998 representing total committed assets of €2.6 billion ($4.1 billion).
DOUGHTY RESTRUCTURES 20:20 MOBILE
Doughty Hanson, a European buyout firm, has rescued its investment in 20:20 Mobile Group, a UK mobile phone distributor, by handing the banks behind the buyout half its equity stake and making a fresh capital injection of £15 million (€19 million; $30 million). The company said the financial restructuring, which includes a reduction in bank debt by the consortium led by RBS, provides the company with a stable financial platform for future growth. Its net debt is now £92 million. Doughty Hanson retains 45 percent in the business, while management, led by chief executive Meinie Oldersma and chief financial officer Nick Smith, hold 10 percent.
INDUSTRY VETERAN BACKS HEDGE FUND DEAL
Sir Ronald Cohen, the founding partner and former chairman of Apax Partners, has teamed with boutique investment bank Jefferies to take a minority stake in International Asset Management (IAM), a fund of hedge funds manager based in London. The deal marks the return to independence for IAM, one of the oldest fund of hedge funds managers, which was privately owned until February 2006 when it was acquired 100 percent by ABN AMRO Asset Management. The buyout concludes a strategic review that began following the merger in April 2008 of Fortis Investments and ABN AMRO Asset Management. The latter was acquired by Fortis in the consortium bid launched with RBS and Santander for the whole of ABN AMRO in 2007.
BOWMARK RETURNS FROM ADVENTURE
DLJ Merchant Banking Partners, a private equity investment affiliate of Credit Suisse, has helped Bowmark Capital, a UK mid-market firm, to a four times return on its investment in Education and Adventure Travel, an educational activity and residential courses provider. DLJ paid £100 million (€125 million; $198 million) for the business, which has two main brands: School Travel Group (STG) and Kingswood Educational Group. STG is the second-largest operator of school and student educational tours and the market leading provider of school ski trips in the UK. It offers a range of curriculum-based products such as tours of battlefields, classical history sites and performing arts venues, and language- and geography-related trips across Europe, the US, China, South Africa, India and other destinations. Kingswood is the UK's second-largest provider of curriculum-based residential and adventure activity courses. Kingswood operates nine residential sites in the UK and France. Kingswood also operates UK summer camp operator Camp Beaumont.
€85M BET ON GERMAN SOLAR
Intel Capital and Climate Change Capital have co-led an €85 million ($135 million) round of venture funding for German solar cell manufacturer Sulfercell. Intel Capital, the venture arm of Intel Corporation, contributed €24 million in financing and Climate Change Capital, a UK investment bank dedicated to clean energy and a low carbon economy, forked out €12 million. The equity will be used to fund the construction of a new manufacturing facility in Berlin allowing for mass production and to finance long-term development projects.
INDEX GOES SHOPPING ONLINE
Index Ventures, the European venture and growth capital firm, is backing AstleyClarke.com, an online luxury jewellery boutique, with £2.75 million ($5.5 million; €3.5 million) in Series A financing. The London-based company plans to use the funds to further build systems and infrastructure and deliver on an ambitious customer acquisition strategy. Index partner Danny Rimer will join Bec Clarke from AstleyClarke.com and Mark Esiri from Venrex on AstleyClarke.com's board of directors. Bec Clarke established the site in 2006 following her experience as a member of the Tesco.com team. Rimer said: “We believe that the luxury e-tailing sector is exploding and the selection and customer service that consumers experience online is often superior to that of the high street. The luxury designer jewellery space is currently under-penetrated and, given our experience in the online and ecommerce space, it's a natural focus for us.”