Deal Mechanic: Equistone Partners Europe & Global Blue

Last July, Equistone Partners Europe sold travel-related payment services company Global Blue to Silver Lake Partners and Partners Group for €1 billion – generating a return multiple of more than 4x.

When Equistone – formerly Barclays Private Equity – bought Global Blue (then called Global Refund) for €360 million in 2007, it was the second largest investment in the firm’s history. The Switzerland-headquartered business provides tax refund services for retailers to offer to overseas travellers visiting Europe: after making purchases at luxury goods stores within the European Union, foreign customers are able to claim tax refunds at Global Blue locations, which are primarily in airports.

One of the first companies to enter this market more than 30 years ago, by 2007 Global Blue owned roughly half of the market. It was also attractive to Equistone because it ticked two of its favourite sector boxes: financial services and consumer/retail. 

The timing wasn’t ideal: the business had to cope not only with some unexpected shocks – such as when two volcanic eruptions in Iceland shut down European air travel for six days in 2010 – but also the global financial crisis, which inevitably had an impact on tourism.

Nonetheless, during Equistone’s period of ownership, Global Blue doubled its revenues and grew earnings before interest, tax, depreciation and amortisation from €35 million to €97 million. Here are some of the key operational drivers.