Greenfield makes 50-times return

Greenfield Capital Partners, the Dutch distressed buyout firm, has made more than 50 times its money by agreeing to sell mobile phone operator Telfort to KPN, the largest Dutch telecoms company. “The deal shows the benefit of buying telecoms companies in distressed circumstances,” said Stef van Doesburg, a partner at Greenfield. “We believed that even as a bespoke, sub-scale company with entrepreneurial management and smart money, it could be very profitable. We have made more than 50 times our money in just 26 months.”

KPN, advised by ING, has agreed to pay €980m on a debt and cash-free basis to Telfort’s owner, which was advised by JP Morgan. This could rise by a further €140m depending on performance targets being met.

Greenfield acquired Telfort in May 2003 for just for just €25m on a debt-free basis, although the telecoms company had £13m of cash on hand. It bought the business from O2, the UK’s biggest mobile phone company. O2 wrote off about £1.4bn on the sale, after buying Telfort in April 2000 for £1.16bn. Greenfield quickly turned Telfort around, with the company reporting profits of €166.8m for the 12 months to March 31, up from €30.1m in the previous financial year.

Greenfield, advised on the acquisition by Altium Capital, split the holding 60% into its TMT fund and 25% into its telecoms portfolio company, Enertel, The remainder was split between Telfort’s chief executive, Ton aan de Stegge, and the chief financial officer, Robert van Maasakker, as well as two co-investors from the fund.

The shareholding was restructured last October, under the advice of ABN AMRO Corporate Finance. The move brought in one of the TMT fund’s main investors, Marcel Boekhoorn. He took a 52% stake in the telecoms company through his investment vehicle Ramphastos for less than €400m, leaving Greenfield and management holding 48% of Telfort.

Rabobank and Fortis completed the syndication of a €255m debt package backing Boekhoorn’s buyout of Telfort. The facility was split between €215m of senior facilities and a €40m mezzanine piece. Telfort has 2.4m customers and will take KPN to about 20m mobile users.