Silver Lake, Partners Team On Global Blue

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Target: Global Blue

Price: $1.3 billion

Sponsor: Silver Lake, Partners Group

Seller: Equistone

Financial Adviser: JPMorgan, Evercore

Silver Lake and Partners Group have agreed to buy the Swiss tax-free shopping business Global Blue for €1 billion ($1.3 billion) from rival Equistone, according to sister news service Reuters. The two investors beat a handful of other buyout groups including BC Partners, EQT and Thomas H. Lee Partners to buy the fast-growing business.

Headquartered in Nyon, Switzerland, Global Blue’s tax-free shopping business helps overseas travelers in Europe reclaim sales tax on their shopping and offers its service through more than 270,000 retail locations worldwide.

Equistone, formerly Barclays Private Equity, bought Global Blue in 2007 in a deal valuing the business at €360 million. Since then, Global Blue’s revenue has doubled, while EBITDA nearly tripled to €97 million. Global Blue has achieved its growth through targeting travellers from emerging markets, in particular Russia and China. The company handled some 20 million tax transactions in the year to end March.

The company attracted the interest of American Express during the process, people familiar with the process said, but the group did not bid in the final stages, one added.

Silver Lake and Partners Group are likely to write an equity check of around €600 million euros ($755 million) to back the deal, banking sources told Thomson Reuters LPC. The buyout is likely to be backed by some 40 percent debt, but could be even lower than this at around 3.5x the company’s €97 million EBITDA, banking sources added.

Some of the largest merger and acquisition deals done in Europe this year have involved businesses changing hands between private equity groups. CVC acquired Swedish tools company Ahlsell from Cinven and Goldman Sachs Capital Partners, and Bain Capital agreed to buy electrical installations group Bravida from Triton. And a field of largely private equity groups is chasing Europe’s largest frozen foods business Iglo Group.

JPMorgan and Evercore advised Equistone on the sale.

(Simon Meads is a correspondent for Reuters in London.)