Royal Bank Private Equity in £441m public-to-private

Britax, the UK cars and airplane equipment maker, quits the stock market in one of the largest European public-to-private transactions.

Royal Bank Private Equity (RBPE), the captive private equity operation owned by The Royal Bank of Scotland, is the provider of equity capital in one of Europe’s largest public-to-private deals to date.

RBPE is offering £1.47 per share, or £441m in total, for Britax, the UK cars and airplane equipment maker. Three of the Britax’ largest shareholders, Perry Corp, Schroder Investment Management and M&G, have decided to accept the offer, which represents a 10 per cent premium to Britax’ closing price on Tuesday. Between them, the three institutions account for 20 per cent of the company’s equity.

Speculation that Britax would end its ultimately unhappy spell as a publicly owned enterprise first went round the market in January, when it emerged that the company was considering a delisting.

Last August Britax’ share price collapsed after irregularities were discovered in the books of one of its subsidiaries. A recovery began only after shareholders were told that a buyout might be on the cards.

David Newlands, Chairman of Britax said the company recommended RBPE’s offer which it believed represented “immediate, fair and reasonable value for Britax shareholders”.

According to a source close to the deal, RBPE is keen to grow, both organically and by acquisition, all three core business areas of the business: aircraft interior, child car safety equipment and surveillance equipment for security vehicles. Longterm, RBPE would consider a separate exit decision for each division, the source added, saying that it was unlikely for Britax to be sold in one piece at the end of RBPE’s investment.

TextLehman Brothers has been mandated to underwrite a £348m loan package which will include a mezzanine tranche, Financial News reports.

RBPE, which was advised by PricewaterhouseCoopers, had John Dillon, Richard Caston and Rob Freer working on the deal. Britax was advised by Lazard.