GRAVITATING TO THE CENTREThe table shows private equity investment into companies in Centraland Eastern Europe almost doubling between 2006 and 2007.
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PERMIRA SELLS JET BUSINESS
Private equity firm Permira has sold its majority interest in Swiss business aviation services company Jet Aviation for $2.3 billion, less than three years after acquiring the Zurich-based business. US defence contractor General Dynamics Group has agreed to acquire all shares of Jet Aviation, pending customary regulatory approval. The boards of directors of General Dynamics and Jet Aviation have both endorsed the transaction, and the deal is expected to close by the end of the year, according to a statement. Londonbased Permira purchased Jet Aviation in 2005 for an undisclosed price from then owners the Hirschmann family. Swiss reports suggested the sale price at the time was between €515 million to €644 million. Since the acquisition, Zurich-based Jet Aviation has grown its executive jet charter fleet from 160 to 200 aircraft and its employee count from 3,500 to 5,600.
RISE IN BOLT-ON DEALS FORECAST
UK mid-market private equity firms are preparing for a wave of bolt-on acquisitions while simultaneously delaying the sale of their investments as uncertainty in pricing persists, according to a survey conducted by UK accounting firm BDO Stoy Hayward. The survey – which explored the views of 100 private equity-backed mid-market firms and 30 private equity investors in the UK – found that 51 percent of private equity-backed companies expect to acquire another business prior to being sold on. This figure rises to 80 percent among companies that did their deals in the last 12 months.
FASHION HOUSE HEADS TO JAPAN
Change Capital Partners, a Londonbased private equity firm specialising in branded goods and retail, has agreed to sell fashion house Jil Sander to Tokyo-listed apparel group Onward Holdings and its subsidiary GIBO for €167 million. GIBO has licensing agreements with fashion brands including Marc Jacobs, John Galliano and Roberto Cavalli. The company has also helped incubate emerging designers such as Alexander McQueen, Helmut Lang and Hussein Chalayan. Jil Sander was acquired by Change Capital in April 2006 from luxury goods giant Prada for an undisclosed amount.
DUTCH GP DISEMBARKS FROM LUXURY YACHTS
Mid-market Dutch private equity firm Egeria will sell portfolio company Royal van Lent to French conglomerate LVMH Moët Hennessy-Louis Vuitton for an undisclosed price. A Reuters report cited an unnamed source as saying the deal was valued at “less than €500 million”, and was equivalent to 11 times Royal van Lent's net profits. The deal is subject to regulatory approval, Egeria said in a statement, which also noted it had informed relevant trade unions. Egeria purchased the 160-year old yacht maker, whose flagship brand is Feadship, in August 2006. The custom built yacht market has strong prospects, with orders for yachts bigger than 50 metres experiencing 20 percent annual growth since 2000, LVMH said in a separate statement.
CD&R WINS BODYCOTE BATTLE
Operationally-focused buyout house Clayton Dubilier & Rice (CD&R) is to acquire the UK's Bodycote Testing Group (BTG), an international materials testing company, from parent company Bodycote in a carve-out deal worth £417 million. CD&R beat a host of other private equity bids, including offers from CCMP Capital, CVC Capital Partners and Warburg Pincus, in an auction process that began in April this year. Fred kindle, who joined CD&R as a partner in June this year, will join BTG as chairman, while incumbent chief executive Jerry Higgins will step down. kindle, previously president and chief executive of NYSE-listed utilities technology company ABB, will assume a “hands on” role while CD&R search for a replacement for Higgins.
HOT DEAL FOR AAC
AAC Capital Partners, the former captive buyout arm of ABN AMRO, has acquired Tylö Group, a manufacturer of saunas, from its Swedish family owners for an undisclosed sum. Tylö will be merged with AAC portfolio company Helo Group, formerly known as Saunatec, a Finnish operator which has been under AAC's ownership since 2006. In January 2008 Helo acquired a smaller operator, Lumilaude. The combined entity will have an annual turnover of around €86 million. Johan Bjurström, managing partner at AAC's Stockholm office, cited international growth as a future driver for the business.
SECOND ADD-ON FOR BAIRD COMPANY
Baird Private Equity's UK branch has supported portfolio company Choices Holdings' second add-on acquisition since acquiring the assisted living services provider two years ago. Choices has agreed to purchase fellow Scotland-based domiciliary care services company Domiciliary Care for an undisclosed sum. Based in Clydesbank, Domiciliary Care offers in-house services to clients with physical disabilities, mental health problems, sensory impairment, addiction problems, HIV/AIDS and learning disabilities.
PE BIDDERS WALK AWAY FROM INFORMA
A consortium of private equity bidders led by Providence Equity Partners has walked away from talks to buy UK business media group Informa for £1.9 billion (€2.4 billion; $3.5 billion). Having had their bid rejected earlier this month, the consortium released a joint statement on the London Stock Exchange announcing its withdrawal from the process, but reserving the right make another bid within the next six months. The consortium, consisting of Providence, The Carlyle Group and The Blackstone Group, refused to better their 4 September offer of 450 pence per share despite the fact the company's chairman, Derek Mapp, characterised it as “significantly undervaluing” the company.
HG BOOKS 3.7X RETURN
European private equity firm HgCapital has generated a return of 3.7 times its initial £27 million investment on a buy-and-build play in the German computer software market. The sale of Addison Software has returned £123 million (€155 million; $219 million) to investors. Wolters kluwer, an international multimedia company, acquired Addison ahead of private equity and other trade bidders, via an auction run by Lazard. Since acquiring Addison in 2005, HgCapital spent roughly £6 million for 10 bolt-on acquisitions. HgCapital takes a sector-based approach to sourcing deals and said in a statement that it identified regulatory driven subscription-based software as a growth opportunity in 2003.