HgCapital has sold its investment in Tunstall Holdings Limited, a manufacturer and provider of personal and home reassurance products, to Bridgepoint in a secondary buyout transaction worth £225m. HgCapital bought the business from the private Tedco group in November 1999 for £102m. (Tedco group had bought the business in May 1998 (following bid talks that began in October the previous year) for £52.8m in a public-to-private transaction.)
Last year Tunstall was recapitalized, allowing HgCapital to return £26m to its investors. Following the sale HgCapital’s £51m investment will have returned a total of £136m to investors, representing 2.8 time cost and an IRR of 22%, a further £3.3m consideration is dependent upon performance of the business this year.
Lindsay Dibden, head of the healthcare team at HgCapital, said: “The business has developed new products, expanded internationally and improved operations, and is now the leading European player in the sector.”
HgCapital Trust plc, a quoted investment trust that participates in all HgCapital’s investments, will receive £16m in cash following the sale.