TDR Capital pays €320m for Algeco stake

TDR Capital, the UK private equity firm, has agreed to pay German tourist operator TUI €320m for a 66.98% stake in Algeco, a French-based provider of modular buildings.

Algeco, the French provider of modular buildings, will become TDR Capital’s third portfolio company after the London-based investor agreed to pay Germany’s TUI €320 million ($398 million) for a 66.98 percent stake.

TDR is completing the transaction through Ristretto, a newly formed company. The purchase price represents a 41 percent premium to Algeco’s share price on 20 January 2004, prior to TUI’s announcement of a potential sale of its stake.

The deal is expected to complete by the end of September 2004, subject to antitrust approval and TUI supervisory board approval. Following the deal, a price guarantee offer will be made to Algeco’s other shareholders, valuing the whole company at around €478 million.

Algeco rents and sells modular buildings (temporary or permanent prefabricated buildings) to public authorities, industrial and commercial clients and has more than 105,000 units located on 82 sites in France, Germany, the Benelux region, Spain, Portugal and Italy. The firm, which is listed on Euronext Paris, also owns LPR, a pallets rental and logistics service for FMCG manufacturers.

“Together with Algeco’s management and employees we are confident that we can develop the company’s services and geographic reach further by utilising our sectoral knowledge and financial expertise,” said Manjit Dale, founding partner of TDR Capital.

Morgan Stanley acted as financial adviser to TDR Capital and Ristretto on the transaction.

TDR Capital was set up by former DB Capital executives Manjit Dale and Stephen Robertson, along with Tudor Capital, an affiliate of alternative asset manager Tudor Group. The firm closed its debut TDR Capital LP fund on €500 million in March 2004, from which it has made two public-to-privates acquisitions in the UK restaurant sector: Pizza Express (£300 million) and ASK Central (£230 million).