News: Deals & Exits

Doughty expands German portfolio
Doughty Hanson, through its $630m Doughty Hanson Real Estate Fund, has acquired the former headquarters of Grundig, the German audio-video equipment manufacturer.

The deal, involving 24 properties situated in a single office complex in Fürth, southern Germany, is Doughty's third in the country. The firm is currently developing an office/retail project in Munich, and has recently bought 1,200 residential units in six properties from Gewobag in Berlin, one of the city's largest housing companies.

Doughty's real estate fund, run by 20 professionals, was raised in 1999. It is the largest such vehicle operated by a private equity firm in Europe. The fund, a third of which has been invested, has done 12 deals across the continent with a combined transaction value of more than $1bn. It has acquired the former Milan headquarters of Alcatel. In the same city, it has also invested in a build-tosuit development for L'Oréal Italia.

Like other large private equity partnerships such as The Carlyle Group, which is also active in real estate investment, and The Blackstone Group, Doughty is looking to diversify its product range. The firm is currently raising a technology venture capital fund, for which it has received commitments worth $275m. A new LBO fund is planned for next year.

Suala lands Mivisa
Suala Capital Advisers, the Spanish private equity firm, and PAI Management, the French private equity operation that has grown out of BNP Paribas, have acquired Spain's leading canning company Mivisa Envases. Suala has taken a 50 per cent stake and PAI the remainder.

The sale came after an auction managed by KPMG that, given the size of the transaction and the personalities involved, attracted immense local interest and press coverage.

The purchase price has not been disclosed but is estimated to be in the region of €300m. According to a source close to the deal, the transaction included a senior and subordinated debt facility along with a working capital provision totalling €200m. The debt was provided by Barclays Capital, Credit Lyonnais and Banesto.

Suala Capital Advisers is chaired by high profile Spanish banker Ana Patricia Botin, who is on the board of banking giant Santander Central Hispano. Originally set up to invest in technology companies, the company has reinvented itself as a much more broadly based investor. Its first fund closed at €100m and the firm has been busy raising a new fund that builds on this new orientation.

Given that the estimated size of equity investment in Mivisa is €100m, it was inevitable that Suala would seek a co-investor. The much larger PAI Management grew out of BNP Paribas and, although the French banking group has continued to invest in the firms' funds, the private equity firm no longer relies on the BNP Paribas balance sheet. PAI invested in Mivisa through its PAI Europe III fund and is understood to be raising a new fund at present.

Largest European LBO complete
Goldman Sachs Capital Partners, Permira and Schroder Ventures Life Sciences have closed the acquisition of Cognis from Henkel. The deal is the largest LBO completed in Europe to date.

Having initially agreed to pay €2.6bn for the under-performing independent chemicals division, the syndicate have confirmed an agreement with Henkel to complete the transaction at an enterprise value of €2.5bn. The price was renegotiated after Cognis' earnings outlook changed following the events of September 11.

Including €500m of working capital, the deal has a total transaction value of €3bn. Goldman Sachs, JPMorgan, HypoVereinsbank and Schroder Salomon Smith Barney are arranging the debt financing package for the transaction.

Cognis recorded sales of €3.2bn last year, which amounted to 23 per cent of Henkel's total.

Permira exits from Domoservices
A syndicate led by Permira, the European LBO house formerly known as Schroder Ventures, has sold Domoservices to trade buyer CGST Save, who, like Domoservices, are a French heating specialist. Charterhouse Development Capital and Domoservices' management also participated in the sale.

The financial details of the transaction have not been disclosed, but a spokesman for Permira said the firm had generated a return on the investment that was above average.

The consortium acquired Domoservices in a secondary buyout in 1997 for an undisclosed amount. French buyout firm LBO France had held 60 per cent of the company, with a group of Italian investors also involved in the deal. When Permira bought the business the deal was known to be the largest LBO to have been completed in France. Citibank and Dresdner Kleinwort Benson helped with the finaning of the deal.

Domoservices was first put up for sale at the beginning of 2001 after the business had been grown over the past four years, largely by way of integrating a number of acquisitions in France. Today the company maintains boilers in one million households. In 2000 it recorded €115m in sales.

LBO France buys metering assets
LBO France, the Paris-based leveraged buyout specialist, has invested in the MBO of the metering products and systems business of Schlumberger Resource Management Services.

A management team lead by former Schlumberger executives Jean-Paul Bize and Clermont Matton is buying all of the Schlumberger metering assets except the electricity and water meters in North America.

To run the business, Bize and Matton will be heading up a new company called Actaris and, alongside other employees, own 10 per cent of the equity. LBO France owns 90 per cent of Actaris.

It was not disclosed how much the buyout team agreed to pay for the assets. LBO France will provide one third of the funding by way of an equity capital injection. The Royal Bank of Scotland and ING Barings share a mandate to arrange debt financing to fund the deal.

Actaris has a 25 per cent share of the global metering market. The company has 8,200 employees and in 2000 generated a turnover of $750m. The group is active in more than 30 countries with a strong presence in Europe, Asia and South America.

CVC agrees buyout with Aventis CVC Capital Partners, the European buyout house, has agreed to buy Aventis Animal Nutrition, the nutritional feed additives business sold by Franco-German life sciences conglomerate Aventis. The price has not been disclosed. According to a source, the debt tranche totals less than €200m, two thirds of which will be used to finance the acquisition and the remainder will be working capital. Gearing is understood to be low. Debt financing will be provided by a syndicate led by JP Morgan and Barclays Capital and also comprising Natexis Banques Populaires, The Royal Bank of Scotland and ABN Amro Bank.

Lehman buys Telecom Italia satellite interests
Lehman Brothers Merchant Banking Partners has agreed to pay Telecom Italia €450m for its stakes in satellite operators Eutelsat, Intelsat, Inmarsat and New Skies Satellites. The assets will be transferred to a new vehicle in which Lehman will have a 70 per cent interest. Telecom Italia will have 30 per cent. Following the deal Lehman is now the second-largest shareholder in Paris-based Eutelsat after France Telecom.

3i in software joint venture
3i, Accenture, Nokia and Sampo, the Finnish financial services company, have joined forces to create Meridea Financial Software, a company developing banking and financial software for desktop and mobile online services. Esa Tihilö, the former head of ICL's global e-business operations, will take the reigns as CEO. The company's software allows consumers access to financial information via a number of mediums including mobile devices, the internet and digital TV.

Advent, Warburg Pincus back Netik
Advent Venture Partners and Warburg Pincus have invested £10.6m in a second round financing for Netik, a financial services software company. Advent led the round with a £8.5m contribution. The funding is expected to last Netik until it reaches profitability. Warburg Pincus first injected growth capital into the business in 1999.

Argus funds Polish newspaper purchase
Argus Capital Group, a division of Pricoa Capital and part of Prudential Investment Management, has invested $6m in DD Publishing, a holding company in Luxembourg that will use the funds to acquire the distribution of a Warsaw-based, home-delivered free newspaper. DD Publishing has plans to launch the paper in other Polish cities to create a nation-wide network. The investment was made through Argus Capital Partners Fund I.

Barclays Private Equity in the money
Barclays Private Equity has doubled its money from an £11.5m investment it made in 1998 when it backed the buyout of Ravenstock, a UK specialist equipment hire company, from Good Durrand. Barclays has now sold the business to Mobile Storage Group, a US trade buyer looking to expand in Europe.

Baring invests in Polish radio sector
Baring Private Equity Partners, through its Baring Central European Fund, has invested €11.5m in CR Media, a Polish advertising broker. CR Media will use the funds to acquire a number of Polish radio stations. CR Media already operates an extensive broadcasting network and is looking to take advantage of sector consolidation in Poland.

Phoenix Equity Partners in fashion deal
Newly formed private equity firm Equinox Luxury Holdings, backed by Phoenix Equity Partners, has agreed to take a 50 per cent stake in Jimmy Choo, the luxury shoemaker. In a deal valuing Jimmy Choo at $30m, Equinox is also providing working capital. For Phoenix, it is the first deal since buying itself out of Credit Suisse First Boston, which it became a part of when the investment bank bought DLJ.

Big Irish deal for Benchmark
Benchmark Capital has made its biggest investment in Europe to date with a $20m investment in Openet Telecom, an Irish company developing telecommunications software. The company makes mediation software that gathers and distributes user data relating to telephone calls. Benchmark invested from its $750m European fund.

GE Equity bets on vending machines
GE Equity's European arm has announced a $9m investment in a 25 per cent stake in Nuova Bianchi, the second largest maker of vending machines in Italy. The familyowned business, is keen to expand into the US and has plans to seek a listing on a stock exchange within the next three to four years.