ABN AMRO exits Epwin

ABN AMRO Capital has realised its mezzanine investment in the UK buildings products company, Epwin, through a refinancing. New senior debt facilities worth GBP53 million were lead arranged by United Bank of Kuwait, the syndicate also included Lloyds TSB, Royal Bank of Scotland, Bank of Scotland and Commerzbank. The IRR on the investment was in the mid-thirties.

ABN AMRO Capital invested in the public-to-private of the company, which was completed without private equity funding, at the end of 1999. Hawkpoint Partners advised on the deal, which was also backed by Commerzbank and Lloyds TSB. ABN AMRO Mezzanine invested a GBP10 million mezzanine tranche at the time of the original transaction and then arranged an additional GBP4 million facility to part finance Epwin’s acquisition of Swish Building products in November 2000. The total size of the original deal was around GBP55 million, with the shares costing GBP44.4 million and GBP7 million of debt.

The Epwin Group comprises 30 operating companies throughout the UK, employing over 2,000 people. It had a turnover in excess of GBP150 million in 2001. The group is the UK’s third largest extruder of PVC-U and PVC-UE products, including windows, doors and conservatories. Founded in 1976 by its present chairman, Jim Rawson, the company was floated on the London Stock Exchange in 1987 and privatised again after 13 years.

In June the Epwin Group sold Berlinex, its Canadian subsidiary, to Pennsylvania-based Veka Holdings after deciding to focus on its UK markets where last year it achieved record increases in turnover and profits. The cash from this sale was used to repay senior debt.

ABN AMRO’s dedicated mezzanine unit was closed and rolled into the bank’s UK private equity practise earlier this year. John Sealy, the only member of the mezzanine team still with the bank, is staying on to oversee the remaining mezzanine portfolio before transferring to private equity full-time. “There’s no time pressure to make exits as the partnership doesn’t mature until 2007. This deal gave us a good return, it was good value and the sensible thing to do.”

Also in July, ABM AMRO Capital partially exited its equity investment in the PTP of the French De Dietrich group.