Welcome Break, a UK motorway service station chain, is reportedly set to complete a £300 million (€447 million; $589 million) recapitalisation this week.
The Financial Times reports that Welcome Break, which has been owned by Investcorp since 1997, is about to finalise a refinancing package that will value the company at about £500 million and generate a dividend of about £150 million for its private equity backer.
During its ten-year period of ownership, Investcorp has gradually been nursing Welcome Break back to health after a difficult start. The Middle Eastern investment group bought the company for £473 million, financing the deal through a £376 million “whole business securitisation” process. However, the value of the bond collapsed after the company’s ambitious growth strategy failed to bear fruit.
The company’s current chief executive, Rod McKie, joined Welcome Break in 2001 with a brief to turn the company around, and subsequently sold off nine of its properties to property tycoon Robert Tchenguiz for £270 million, in a bid to stave off a financial crisis. It is now left with 23 sites, which according to McKie are now enjoying an increase in like-for-like sales of 8 percent per year.