Doughty Hanson has made its first exit in two years with the secondary buyout of Italian FL Selenia to Vestar Capital Partners for €670m. The exit is also the first from the firm’s third fund, Doughty Hanson III, which closed in September 1998 raising $2.66bn.
The sale to Vestar Capital represents a 2.4 times return on Doughty Hanson’s investment and a gross IRR of 30%. The terms of the sale also include an additional upside for Doughty Hanson investors with a deferred consideration reliant upon the continued strong performance and sale or IPO of FL Selenia.
The exit should provide a boost for the firm’s fourth fund raising effort, which started around a year ago. This fund has a target of €3bn, but has yet to see a first close.
The sale is also a significant deal for the Italian market and should help boost divestment figures, which were down by value in 2002 from €908.7mn in 2001 to €588.5m.
Doughty Hanson acquired FL Selenia from a division of Fiat in April 2000. Michael Russo of Doughty Hanson in Milan, said: “Since our acquisition of FL Selenia just three years ago, the company, under the leadership of Aldino Bellazzini has performed extremely well by positioning itself as a lubricant specialist offering a range of quality products.”
Doughty Hanson’s last exit was in 2001 when it realised its investment in Soudronic, a global manufacturer of turnkey systems for the metal packaging industry and of high technology laser welding equipment for the automotive industry in a secondary buyout worth CHF340m.