The European Commission has begun a consultation exercise that is expected to lead to new rules on the capital that must be held by European insurers. That is an important project for private equity practitioners, because around 13% of all funds raised between 1999 and 2003 came from those investors, according to law firm SJ Berwin.
The European Private Equity and Venture Capital Association (EVCA) has already made its views plain.
In a response to the consultation issued earlier this month, the industry association has supported a “prudent person” rule, which would continue to allow insurers to take full advantage of the asset class, while meeting the need for measured regulation. European insurers are the third largest source of European private equity, after banks and pension funds.
Apax Partners and Vista Capital acquired Grupo Itevelesa, the Spanish industrial inspection company, from CVC Capital Partners. The deal also provided an exit for minority shareholders and was partly financed with a loan underwritten by RBS, Calyon, HBOS, ING and Caja Madrid. Grupo Itevelesa was established in 1982
and has annual turnover of €42m. Candover acquired it in 1999. BNP Paribas advised the buyers, along with 360 Corporate. Arcano Asesores Financieros advised the vendors. Nicolas Bonilla, head of Apax Spain, said: “Itevelesa is our fourth investment in Spain and demonstrates our high level of activity in Spanish private equity.”
3i and CapMan are selling their 53% stake in Karelia Corporation to the Hartwall family and Hartwall Capital Oy Ab. The net value of the company is about €115m. After the acquisition, the Hartwall family will own approximately 64% of Karelia. Heikki Väänänen, the founder of the business, is increasing his stake slightly to 33.5% and
will continue as chairman. Karelia is the third biggest flooring manufacturer in Europe. The Karelia Corporation comprises parent company Karelia Corporation and wholly-owned subsidiaries FinnWoodFloors and Upofloor. Since 3i’s initial investment, turnover has increased by €30m.
DBG Eastern Europe’s Central and Eastern European private equity fund completed its first investment in Romania. The fund acquired a minority stake in Flanco International, a retailer of household electronic products, which operates from 80 outlets in Romania. DBG committed €6.5m to the deal. DBG focuses on later-stage venture investments, buyouts and industry consolidation deals. Flanco has annual sales of more than €100m and competes in a fragmented marketplace.
European venture capital investment slowed in the third quarter, according to figures from EVCA released by Ernst & Young & Thomson VentureOne. The market was worth €769.8m from 224 deals, which represents a 9% decline in capital invested and a 13% decline in deals from the third quarter of 2003. The amount invested in the first three-quarters of 2003 is higher than the comparable period for 2003, however. UK deals notched in at 56 in the third quarter, a decline of 26% on the preceding quarter.
This is the second lowest deal value in the last five years in Europe’s largest market. France was the success story, with 48 deals and €163.1m invested, twice the amount invested in the third quarter of 2003.