London-based Central and Eastern Europe investor Mid Europa Partners has paid an undisclosed amount to purchase Lehman Brothers' 37.3 percent stake in Czech telecom provider Falcon Group. Mid Europa and Lehman were members of an investment consortium that bought into Falcon two years ago. Mid Europa now owns a 74.6 percent stake in the firm.
Stockholm-based EQT Partners has sold German lifting and moving equipment business Pfaff Beteiligungs for $53 million in cash to publicly listed US conglomerate Columbus McKinnon. EQT's turnaround fund picked up an 85 percent stake in the firm in 2006 for an undisclosed amount, when it was “heavily indebted and under-performing”according to EQT. Last year, the firm was profitable and posted revenues of nearly $90 million.
London-based mid-market firm Montagu Private Equity pulled an auction process on behalf of German bandage maker BSN Medical because it did not believe initial bids could be delivered, according to a source close to the situation. The firm had been expected to sell for up to €1.9 billion by the end of the first quarter of 2009. Montagu said it would now support the firm's further growth.
Deal value in the UK private equity market was only 4 percent lower in the first nine months of 2008 than in the same period of 2006, according to the Centre for Management Buyout Research. However, this apparently healthy level of activity was skewed by a rush to exit family companies in the first quarter following an increase in capital gains tax that took effect on April 6.
Enterprise Investors, the Polish private equity firm, has submitted a €143 million offer to buy a 43 percent stake in Warsaw-listed drinks producer Kofola-Hoop, whose brands include carbonated soft drink Kofola. The deal is scheduled to complete on 6 November and would be the largest-ever investment in the FMCG sector in the Central and Eastern Europe region.
UK mid-market investor Close Brothers Private Equity has delivered a 3.5 times cash return from the sale of chemicals business BWA Water Additives to United International Bank, a Bahrain-based investment bank. CBPE carved the Manchester headquartered business out of US listed parent Chemtura Corporation for $85 million in 2006.
Texas-based GameStop, the world's largest video game retailer, has agreed to buy French video game seller Micromania from Paris-based private equity firm L Capital for $700 million. GameStop has nearly 6,000 stores in the US, Canada, Australia and New Zealand. The Micromania deal, currently awaiting approval from the European Commission, would give it over 1,000 stores throughout Europe.
Towerbrook Capital Partners has defied the credit crunch to complete the CHF87 million (€55 million; $79 million) recapitalisation of portfolio company Odlo, a Norwegian designer, manufacturer and distributor of sportswear. A new debt facility comprises CHF61.7 million of senior debt and a revolving facility of CHF25.0 million structured by UBS, Luzerner Kantonalbank and Zuger Kantonalbank.
The Paris office of European Capital has led a €30 million mezzanine investment in Compagnie Européenne de Prestations Logistiques, a French warehousing and logistics firm recently acquired by Bahrain's Arcapita Bank from French-Canadian investment group Sagard Private Equity for between €550 million and €600 million. London-based Intermediate Capital Group invested an undisclosed amount alongside European Capital.
ONWARDS AND UPWARDS
British Venture Capital Association (BVCA) chief Simon Walker issued a rallying cry on behalf of the industry at a fringe event at the UK's Conservative Party conference in Birmingham, England. He said that the UK needed “more private equity, not less”in an environment where “the banks have stopped lending and everyone else seems to be hunkering down”.
An investor group including Parisbased Xange Private Equity has invested $12 million in Voss, a UKbased communications software company, to help fuel the company's expansion. Xange, which closed a €50 million fund in March this year, was joined in the financing by UK early-stage venture capital firms Eden Ventures and Pyrford Enterprises.
Horizon Capital, a private equity firm focussed on Ukraine and Moldova, has invested $15 million to help expand Ukrainian supermarket chain Fresh from a total of eight stores to 58 stores and three logistics centres by 2010. The investment was made alongside the International Finance Corporation, which agreed to invest $20 million in the firm in August.
German venture capital firms Earlybird and Neuhaus Partners have bet €4 million on a firm focussed on so-called social lending. Berlin-based smava is a web platform allowing individuals to arrange person-to-person loans. Revenue is generated from a one-off one percent fee from the borrower when the loan is funded (see also p. 46).
Argos Soditic, a mid-market private equity firm with offices in Paris, Geneva and Milan, has taken majority stake in French technology security consulting firm LEXSI for an undisclosed sum. LEXSI is seen as a counter-cyclical investment given that fraud tends to become more prevalent in a downturn and that companies need to manage their risks more tightly.