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CD&R considers options for Belron, including potential single-asset process

GP-led deals like single-asset continuation fund processes are helping to drive secondaries activities in the recovering markets.

Clayton Dubilier & Rice is exploring options for its portfolio company Belron, which operates various glass repair brands globally, including a potential process that would give the firm more time to manage and grow the company, sources told Buyouts.

A single-asset deal for Belron would be among several that have been shopped by established GPs looking for more time to grow choice assets. GP-led deals like single-asset continuation fund processes are helping to drive secondaries activities in the recovering markets.

A secondary for Belron would not happen until after a minority stake sale, which is another potential option for the company, one of the sources said. Belgian newspaper De Tijd reported last month that CD&R was in talks to sell a quarter of its stake in Belron. A spokesman for CD&R declined to comment about a sales process.

Lazard is working with CD&R as secondaries adviser, sources said.

CD&R acquired a 40 percent stake in Belron in 2018 through its tenth fund. The deal valued Belron at €3 billion, which was expected to drop to €1.55 billion after deducting debt and a €453 million dividend payment, PE Hub previously reported.

In general, single-asset deals give limited partners in the original fund the option to either cash out of their interest in the company, or reinvest through the continuation fund created to hold the asset. In many recent single-asset deals, LPs who choose to roll their stakes into the continuation fund must agree to the new terms on the continuation pool, and often have the ability to increase their commitment with fresh capital.

CD&R collected $16 billion for its Fund XI in February, Private Equity International reported.

Secondaries volume, which came in around $60 billion last year, is expected to recover its momentum as markets emerge from the pandemic. GP-led deals, like single-asset processes and direct secondaries, represented about 43 percent of total volume last year, according to Campbell Lutyens’ full-year 2020 secondaries report.

Of that GP-led total, single-asset deals represented about 35 percent of volume, the report said. “Single asset secondaries experienced the strongest year-over-year growth of any GP-led transaction,” the report said.