Private equity-backed takeovers subject to EU competition law

AA/Saga

Private equity backers: CVC, Charterhouse and Permira

Business description: Insurance and other services

Deal value: €4.88bn

Notified: 03/08/07

Provisional deadline: n/a

Cleared: 10/09/07

The European Commission has approved, under the EU Merger Regulation, the proposed take-over of the AA and Saga, both active in the provision of vehicle breakdown services in the UK, by three private equity firms, CVC of Jersey, the Channel Islands, Charterhouse of the UK and Permira of Guernsey, the Channel Islands. The Commission has concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. CVC, Charterhouse and Permira are private equity funds with investments in a wide range of different businesses.

The AA’s main activity is the provision of vehicle breakdown services in the UK and Ireland. In addition, the AA provides insurance distribution services, insurance underwriting services and certain financial services products. Saga provides a variety of services targeting the over 50s, including travel, financial services, insurances and some breakdown services. The Commission’s examination of the proposed transaction showed that there is an overlap between the AA and Saga for the provision of breakdown services in the UK. Given the very modest presence of Saga on the market for breakdown services, the Commission concluded that the proposed transaction would not risk impeding effective competition on this market.

Brake Bros

Private equity backer: Bain Capital

Business description: Food service company

Deal value: £1.3bn

Notified: 08/08/07

Provisional deadline: n/a

Cleared: 07/09/07

The European Commission has approved the purchase of UK-based food service company Brake Bros by US private equity group Bain Capital. The transaction was reviewed under the EU’s ‘simplified’ merger review procedure for cases which the commission believes do not pose competition concerns. Private equity group Clayton, Dubilier & Rice bought Brake in 2002 for about £430m.

BvDEP

Private equity backer: BC Funds

Business description: Publishing

Deal value: Undisclosed

Notified: 28/08/07

Provisional deadline: 02/10/07

Cleared: n/a

The European Commission has the deadline for its inquiry into BC Funds‘ acquisition of Bureau van Dijk Electronic Publishing BV (BvDEP), the Dutch business information publisher. BC Funds is a private equity vehicle managed by CIE Management Ltd and based in the Channel Islands.

Hejenion (Soflog-Telis)

Private equity backers: 3i and European Capital

Business description: Sub-contractor for outsourced industrial logistics

Deal value: Undisclosed

Notified: 26/07/07

Provisional deadline: n/a

Cleared: 24/08/07

The EU has approved the acquisition by European Capital and 3i of Hejenion, the holding company of the Soflog Group. European Capital invested €29m in the buyout of Soflog-Telis, a leading provider of logistics services to major industrial customers in France. The investment was led by the Paris office of European Capital Financial Services Limited (European Capital Services), the sub-investment manager of European Capital, and takes the form of equity and senior and junior mezzanine debt. Following the investment, European Capital and the Soflog-Telis’ management team led by Bruno de Chaisemartin, former Chairman, are the majority shareholders of Soflog-Telis with a combined 55% ownership. 3i maintains its current 45% stake.

HT Troplast

Private equity backer: Arcapita

Business description: PVC window and door profiles maker

Deal value: Undisclosed

Notified: 31/08/07

Provisional deadline: 05/10/07

Cleared: n/a

The Carlyle Group and Advent International have sold HT Troplast, the European developer, manufacturer and marketer of PVC window and door profiles, to international investment firm Arcapita. Financial details of the transaction were not disclosed. Carlyle and Advent acquired HT Troplast from RUETGERS AG in January 2005. Headquartered in Troisdorf, Germany, the company currently has 3,750 employees across production and distribution sites in 21 countries worldwide.

Scandlines

Private equity backers: 3i and Allianz Capital Partners

Business description: Ferry operator

Deal value: €1.56bn

Notified: 16/07/07

Provisional deadline: n/a

Cleared: 21/08/07

The EU has approved the acquisition of ferry operator Scandlines to a consortium of 3i and Allianz Capital Partners. Both firms will take a 40% stake in the business, which cost them a total of €1.5bn to buy from Germany’s state railroad, Deutsche Bahn AG, and the Danish government.

Stork

Private equity backer: Candover

Business description: Industrial Group

Deal value: US$2bn

Notified: 23/07/07

Provisional deadline: n/a

Cleared: 20/08/07

UK buyouts house Candover is attempting to acquire Dutch industrial group Stork. Its latest offer of €47 per share closes in September. Candover faces competition from Icelandic food processing equipment maker Marel.

Swets

Private equity backer: Gilde Buyout Partners

Business description: Subscription services

Deal value: Undisclosed

Notified: 06/09/07

Provisional deadline: 04/10/07

Cleared: n/a

Royal Swets & Zeitlinger (Swets), a Dutch subscription services company is to sell 100% of the shares in the company for an undisclosed amount to the Dutch-based investment firm Gilde Buy Out Partners with participation from Swets’ executive management.

Telenor Satellite Services

Private equity backer: Apax Partners

Business description: Satellite-based communication services provider

Deal value: US$400m

Notified: 13/07/07

Provisional deadline: n/a

Cleared: 20/08/07

The European Commission has authorised under the EU Merger Regulation the proposed acquisition of Norwegian Telenor Satellite Services, a company providing satellite-based communication services, by Apax Partners, a French management company of investment funds. The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Apax Partners manages investment funds which hold interests in companies active in different sectors. With respect to the proposed acquisition, Apax indirectly controls France Telecom Mobile Satellite Communications, a company active in satellite-based communication services. Telenor Satellite Services provides communications solutions via satellite. By the proposed acquisition, both companies would combine their activities in the wholesale and retail markets for two-way satellite communication services.

In the wholesale market for two-way satellite communication services, wholesalers sell bulk airtime – which they themselves have bought up-stream from satellite operators such as Inmarsat or Iridium – to re-sellers and to large end-customers. The Commission found that customers would continue to have sufficient alternatives after the transaction, since wholesalers can sell airtime from a number of different satellite operators. The Commission’s market investigation showed that the choice appears to be more limited for some customers active in the maritime or aeronautical sector as only one satellite provider, namely Inmarsat, provides communication services complying with sector-specific regulations established to ensure safety and distress signalling in emergency situations. Whereas the proposed operation does not involve Inmarsat directly, it brings together two wholesalers of such Inmarsat services. However, the Commission found that the merger would not raise competition concerns in this sector as alternatives for two-way communication services complying with regulatory requirements exist, such as HF and VHF radio, and other market players are expected to emerge in the near future at both satellite operator and wholesaler level.

With respect to the retail of two-way communication services, the Commission concluded from the market investigation that a number of strong competitors are present in the market which would allow customers to be able to continue sourcing their needs from a sufficient number of alternative vendors.