News Roundup, March 2010


Montagu Preps BSN IPO

U.K. private equity firm Montagu is gearing up to take BSN Medical public, with an expected valuation of €2 billion.

Potential buyers are also eyeing the company, including private equity groups Apax Partners and Bain Capital. Corporations with an interest in BSN include 3M, Kimberly Clarke, Cardinal Health and Medicine in the United States and Sweden’s Molnlycke Health Care.

Montagu attempted to sell the medical device maker 18 months ago, but the economic downturn put a halt on its plan. It bought the Hamburg-based company for €1.03 billion in 2005, four years after it was founded. —A.D.


Buyout Bids Rejected, IPO Planned for Kabel Deutschland

Private equity firm Providence Equity Partners will list German cable television operator Kabel Deutschland on a stock exchange, abandoning its plan of a billion-euro sale to a buy-out firm, three people with knowledge of the matter told Reuters.

Providence, which owns 88% of Kabel Deutschland, plans to generate €1 billion from the sale, which it will start preparing in the coming days, one source says.

At least four private equity houses—Advent, Carlyle, Bain Capital and a consortium of CVC Partners and BC Partners—had bid between €5 billion and €5.5 billion for Kabel Deutschland, according to sources.—Reuters


Duke Backs Payzone

Private equity group Duke Capital has bought a 69% stake in bankrupt Irish electronic payments company Payzone for €45 million.

Payzone has been struggling since its formation in 2007. It was formed through the merger of Irish e-payment company Alphyra and British ATM operator Cardpoint.

The Irish company currently owes €320m to seven banks including AIB, Bank of Scotland, Royal Bank of Scotland and Abbey National. The amount of debt will be reduced to €80 million, as the banks will also take a 16% equity stake and senior management will take 15%. —A.D.


Pets at New Home

Private equity giant Kohlberg Kravis Roberts & Co. has acquired U.K. retailer Pets at Home from Bridgepoint in a deal worth nearly £1 billion.

Rival bidders for the pet retail company included Apax Partners, Bain and TPG.

Bridgepoint bought out Pets at Home in 2004 for £230 million. The retailer had sales of £404m in the year ended March 2009. —A.D.


Cinven Eyes DFS

London-based Cinven is expected to team up with Rob Templeman, CEO of retailer Debenhams, for a £500 million bid for furniture chain DFS.

In an unusual twist, John Lovering, chairman of Debenhams, was reported to be partnering with buyout firm Permira to bid for the furniture retailer.

DFS is being sold by its founder, Lord Kirkham, and has attracted interest from private equity firms Advent International and Warburg Pincus.

Templeman and Lovering joined forces in 2003, when CVC Capital Partners and TPG took Debenhams private for £1.9 billion. —A.D.


Lust for Lloyds’ PE Unit

Lloyds Banking Group

is still in the early stages of considering options for its private equity unit, sources familiar with the process said, even as interest builds with at least five buyout firms circling.

Britain’s largest retail bank has been mulling over the future of the Bank of Scotland Integrated Finance unit since soon after it completed the takeover of the unit’s former parent, HBOS, in January last year.

Bridgepoint Capital is considering a bid with Lexington Capital, one person familiar with the deal said. Other potential buyers for all or some of the assets include private equity groups 3i, Coller Capital and Advent, other sources close to the process said. —Reuters


HG Warms to Spain

U.K. mid-market private equity firm HG Capital invested €300 million in three projects through its Renewable Power Partners fund.

The firm added two Spanish solar photovoltaic plants and one U.K. onshore wind project. HG acquired the projects with local partner Plenium Partners, a Madrid-based merchant banking firm. HG and Plenium say they plan to continue working together and may build up to seven projects.

HG’s renewable fund portfolio now includes 19 projects either under construction or operational with 325MW of capacity. —A.D.


BC Partners’ Medica Slashes IPO Price

BC Partners-backed French care home operator Medica (MDCA.PA) raised €275 million in an initial public offering in February after cutting the IPO price by about a quarter, setting an example for others mulling stock market flotations.

Medica said it would price its IPO at €13 per share, below a previously indicated range of €16 to €19.50 in an IPO likely to be closely watched by a list of other private equity firms considering IPOs as a way of raising cash from their investments.

“The market is sensitive over valuation, people need some upside,” said a person familiar with the matter. —Reuters


U.K. Firm Eyes First Halal Industrial Park

A venture capital firm is raising funds to launch Europe’s first industrial park for Islamic goods, tapping an under-served market worth up to £4 billion a year in Britain, its chairman says.

The Super Halal Industrial Park will cost about £150 million to build, be based in South Wales and take three to five years to launch, says Mahesh Jayanarayan, chairman of Halal Industries. He says he chose Wales for the project because of its meat industries and affordable land prices.

Halal Industries is a newcomer with no projects yet off the ground, and is backed by Scandinavian investors through Jayanarayan’s U.K.-based partnership Bergstrom Associates. Halal Industries has partnered with the Penang International Halal Hub, the agency set up by the Malaysian state to promote halal-related industries. —Reuters