Private equity groups Providence Equity Partners and Doughty Hanson are expected imminently to announce the £1.5bn purchase of the Caudwell Group, the UK telecommunications company that owns phone retailer Phones 4U.
This would bring to an end a sale process that started in September last year when John Caudwell, the billionaire tycoon who owns 85% of the Caudwell Group, appointed NM Rothschild to carry out a strategic review of the company. He wants to sail around the world, start other businesses and focus on the Caudwell Charity, which mainly supports children in need and the NSPCC.
Caudwell is attractive to these private equity groups for its strong cash flows. Providence is thought likely to take control of Phones 4U, while Doughty would take control of 20:20 Logistics and Dextra – respectively Caudwell’s handset distribution business and mobile accessories distribution arm.
Providence had at first partnered with CVC Capital, while Bain Capital had been Doughty’s original partner but dropped out. Bain is at the moment involved in the largest buyout deal in history – the $33bn acquisition of HCA, the largest hospital owner in the US.
In March this year, Caudwell successfully sold its landline telecoms business with 500,000 customers to UK broadband company Pipex.