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Two deals for Warburg Pincus

It has been a busy week for Warburg Pincus as the global private equity firm announced two deals in one day.

The first deal saw Warburg backed Loyalty Management Group, which created the Nectar card used by a variety of UK retailers, bought by Canadian company Aeroplan Income Fund for £368m (€511.5m).

The business was founded in 2002 by Sir Keith Mills, who organised London’s successful 2012 Olympics bid with backing from private equity firm Warburg Pincus. He stands to make £161m from the sale. According to reports, Warburg Pincus made 6.5 times its money on the deal.

Aeroplan Income Fund also runs some large loyalty card schemes in Canada, principally the air miles equivalent operation for Air Canada. Sir Keith set up the original Air Miles scheme in the UK.

Last year Loyalty Management Group made £23m of earnings before interest, tax, depreciation and amortisation (Ebitda) on £192m of sales. The deal values it at a hefty 16 times Ebitda.

The second deal saw the acquisition of NetCentrum, the second largest internet company in the Czech Republic.

No price was disclosed for the acquisition. The existing shareholders have rolled over some of their proceeds to take a stake in the new business.

Pavel Mucha, chief executive officer of NetCentrum, said that Warburg’s investment would enable further expansion through Central and Eastern Europe.