Cognetas, which has undergone a turbulent year in which it closed two offices, laid off staff and parted company with its managing partner, has been forced to abandon the sale of one of its remaining portfolio companies due to weak bidding.
The company had placed French petrol pump and payment systems group Tokheim on the block earlier this year, with JPMorgan managing the auction.
Energy specialist First Reserve Corporation, Paris-headquartered buyout group PAI Partners, and Rhone Capital submitted bids for the company. Their offers, however, are understood to have been below the €400 million target Cognetas had earmarked for the business. Debt financing to back the bids was apparently not a problem, according to one source, although more leverage would have been available six months ago, the source added.
However, the firm “is in no rush to sell” the business, according to a source close to the firm.
Cognetas bought Tokheim from AXA Private Equity in 2005 for €260 million. It is understood to be highly levered, but its debt burden has been reduced from about €265 million at its peak to about €200 million now, a source with knowledge of the process said.
The A-tranche of that debt is due to mature in 2013, according to a source with knowledge of the matter, making a refinancing next year a priority for the firm. The rest of its debt is not due to mature until 2015 according to a source close to the firm.
Refinancing the debt could prove difficult in the current market given the highly constrained nature of the European bank lending environment.
Cognetas has just seven businesses left in its portfolio, which it will likely try to exit in a bid to impress investors ahead of a possible fundraising in the future. The investment period for the firm’s current fund expired earlier this year; remaining capital in the fund is only available for bolt-on acquisitions.
Cognetas parted company with managing partner Nigel McConnell in June this year, citing “strategic differences,” and has since announced the closure of its London and Frankfurt offices as part of a strategic review that will see it focus instead on the French and Italian markets.