CVC completes 4.25bn of deals

CVC Capital Partners, a London-based buyout house, has capped a busy fortnight following its recent appearance before the Treasury Select Committee, announcing more than €4.25bn of deals.

On July 4, CVC put about €200m into the €800m buyout of Taminco’s, a Ghent, Belgium-based producer of alkylamines and derivatives, which are used by the pharmaceutical, agrochemical, animal feed and water treatment industries.

CVC bought its stake in Taminco from Dutch investor AlpInvest, which purchased the business in a carve-out from Belgian drugs manufacturer UCB in October 2003. Merrill Lynch ran the auction and provided debt alongside Rabobank, Dresdner Kleinwort and Fortis Bank.

The following day, CVC bought the outstanding common stock of luggage business Samsonite, offering US$1.49 per share in a transaction valued at about US$1.7bn, including the assumption of debt.

Ares Management, Bain Capital Partners and Teachers’ Private Capital, which collectively own 85% of Samsonite’s shares, have already approved the transaction, which is expected to close during the fourth quarter. CVC said that about one-third of the capital structure will involve equity.

The business plan for Samsonite, which makes and markets luggage, casual bags, business cases and travel-related products, includes expansion into the luxury market and Asia. Merrill Lynch was involved again, advising Samsonite, while CVC was advised by UBS and Lehman Brothers.

A few days later, CVC made another raid on the public markets, partnering with Parcom Ventures to buy Dutch chemicals business Univar in a €1.516bn take-private. CVC’s investment vehicle Ulysses Luxembourg offered to pay €53.50 in cash, a premium of 37.3% to the most recent closing price prior to the announcement. Majority shareholder Hal Holding, with a 26.6% stake, has already agreed to tender its shares and the transaction is expected to complete in the third quarter.

Parcom Ventures is the private equity arm of ING, which advised CVC alongside Bank of America and Deutsche Bank. CVC said that it intends to back a number of bolt-on acquisitions as well as organic growth in Europe and Asia.

The day after the Univar transaction, CVC agreed to buy DYWIDAG-Systems International, which develops post-tensioning and geotechnical systems for the construction and mining industries, in a secondary buyout from Swedish buyout firm Industri Kapital. Terms were not disclosed but sources said the transaction value was in excess of €1bn, with Industri Kapital netting a three-digit IRR and more than two times money multiple.

Industri Kapital bought DSI in 2005 from the insolvent Walter Bau and has since grown sales by about 35% per annum. Bank of America and Barclays jointly provided debt financing for CVC, while Morgan Stanley handled the sale for Industri Kapital.

With the equity ticket for the above deals likely to exceed €1bn – and industry sources suggesting that CVC is keen to deploy funds after missing out on the chance to take Sainsbury private – the buyout firm is expected to have invested a large part of its €6bn fourth fund, closed in July 2005.

Marketing for a fifth vehicle is expected soon, following a number of other big investments for Fund IV, including the €1.4bn buyout of Dutch waste company AVR and subsequent bolt-on of Van Gansewinkel; the €1.4bn purchase of commercial vehicle hire business Fraikin Group from Eurazeo; and the early 2006 acquisition of Lehman Brothers’ stake in the Formula One racing motor racing business.