Providence offloads Phones 4u

BC Partners is understood to have paid up to £700m for the mobile phone retailer, in what will probably be the penultimate investment from its 2005 fund.

BC Partners has agreed to buy Phones 4u, a mobile phone retailing group, from Providence Equity Partners in a deal understood to be worth between £600 million (€689 million; $969 million) and £700 million. Financial details of the transaction were not disclosed.

Phones 4u, which has a network of more than 500 stores in the UK, reported sales of over £900 million in 2010.

Phones 4u: BC comes calling

Providence, a global private equity firm investing in media, telecoms and entertainment businesses, acquired Phones 4u in 2006, when entrepreneur John Cauldwell sold Cauldwell Group. The group comprised Phones 4u and a logistics business called 20:20. It was sold in its entirety to Providence and Doughty Hanson for a total £1.46 billion.

Providence ran a competitive auction process to sell the asset late in 2010. BC Partners was the last remaining bidder, but the two parties had subsequently failed to agree on the price. Talks resumed bilaterally between BC and Providence early this year.

When the Phones 4u investment completes, which is expected to happen in April, BC Partners will most likely have capacity for one more new investment from its 2005 eighth fund.

BC Partners is currently investing the tail-end of its eighth fund and is in the process of raising its next fund with a target size of €6 billion. Last week the firm held a first close having attracted €4 billion in capital commitments, sounding a positive note to the market.