Two lucrative exits in the lower mid-market suggest UK assets are attracting international interest.
Graphite Capital has agreed to sell tyre distributor Micheldever Tyre Services to Tokyo-listed Sumitomo Rubber Industries in a £215 million ($264 million; €252 million) deal, according to a statement.
The sale to SRI, the sixth-largest tyre manufacturer in the world, will deliver a return on investment of around 3.7x.
Graphite originally backed the £85 million management buy-in/buy-out of MTS in 2006, aiming to consolidate the tyre retail segment in the UK. Under Graphite’s ownership MTS has made 36 bolt-on acquisitions, growing its Protyre retail chain from 16 to 99 outlets.
It has developed divisions servicing vehicle dealerships and fleet operators, and expanded its wholesale customer base by opening additional warehouses and strengthening its product range, the firm said.
Turnover at MTS has grown from £150 million to more than £320 million, and its employee base has grown from around 500 to 1,600.
Graphite closed its latest fund, Graphite Capital Partners VIII, above target on £500 million in 2013.
This week fellow UK firm Bowmark Capital, together with Five Arrows Principal Investments, the private equity business of Rothschild Merchant Banking, agreed to sell Autodata to Solera Holdings in a £340 million deal.
The deal will deliver a return of around 2.5x to Bowmark, it is understood.
Bowmark and Five Arrows Prinicpal Investments acquired Autodata, which provides technical information to the automotive aftermarket, in May 2014. Since then it has enhanced its content and technology platform, expanded its customer base in Europe and Australia, and made three strategic acquisitions in France, Sweden and Finland.
Bowmark is currently investing its fifth fund, which closed on £375 million in 2013 after just 10 weeks in market, as reported by PEI.
According to recently-released research, European mid-market assets are commanding higher prices than ever. Data from private equity firm Argos Soditic and Epsilon Research show that in the third quarter of 2016 buyers were paying, on average, 9.2x earnings for a business in the Eurozone, up from the previous record of 9.1x set in 2006.
Trade buyers were the driving force behind increasing valuations, paying an average multiple of 9.6x EBITDA, compared with private equity buyers, who paid an average 8.7x, as reported by PEI.