Candover, the UK-listed private equity house, achieved a record month for buyout activity in July with the announcement of four new acquisitions totalling approximately US2.1bn.
The latest buying spree includes the US$1.3bn acquisition of consumer products provider Applus Servicios Tecnologicos. This transaction marks Candover’s largest deal to date and is one of the largest by a UK private equity house so far this year, reflecting what has already been a record year for the UK buyout market.
Candover has also acquired UK-listed mail delivery services provider DX Services. The consideration for the deal took the form of an all-cash offer valuing its total share capital at £348.7m.
As part of the deal, Candover also announced the acquisition of Secure Mail Services through the same acquisition vehicle, Mail Acquisitions, for which the consideration offered is undisclosed and is conditional upon the completion of the DX Services transaction.
Through the acquisition of DX Services and Secure Mail Services, Candover hopes to create the leading independent end-to-end service operator in the UK postal market.
“With the recommendation and backing of DX Services’ management for the offer, we are looking forward to proceeding with the combination of the DX Services and Secure Mail Services businesses to create a competitive force in the UK mail delivery market,” said Marek Gumienny, a managing director at Candover.
These deals were followed promptly by the acquisition of optical equipment supplier Linos. This transaction is expected to be made in two steps through an all cash offer valued at US$111.9m.
The bolt-on acquisition for Qioptiq will be executed through Candover’s wholly owned acquisition vehicle Optco Akquisitions and will be financed through its 2001 buyout fund. The purchase price
of US$20.31 per share represents a 44% premium to Linos’s
three month weighted average share price, which according to Candover was justified through the expected revenue streams to stem from the consummation of both Qioptiq and Linos.
These deals represent the most recent acquisitions from Candover’s latest fund, Candover 2005 Fund, which closed in November last year at €3.5bn. The first investment from the fund was the €445m buyout of Norwegian cable TV operator UPC Norway from Liberty Global earlier in the year.
The private equity house has a reasonably broad sector investment base, of which healthcare, technology and support services have been among the most active since the start of the firm in the early 1980s. Candover’s previous investments in those sectors include Inveresk Research Group (healthcare), Innovia Films (industrials) and Hays (support services).
Candover received financial advice on its July buyouts from PricewaterhouseCoopers, Lazard, Panmure Gordon and JPMorgan.