Warburg pays £280m for Survitec

Private equity giant Warburg Pincus has acquired Belfast-based Survitec, a maker of life rafts and life jackets from Montagu Private Equity for £280m.

Warburg Pincus had stiff competition in the acquisition as Permira had entered exclusive talks with Montagu about Survitec in November 2009. It is still not clear why Permira was taken out of the running but according to reports Montagu would not accept less than £280-5m.

With sales of £150m in 2009, Survitec provides safety equipment to the marine, military, and aerospace markets.

Under terms of the transaction, Warburg Pincus will acquire a majority stake of the company, while Survitec’s management will retain a minority shareholding and continue to lead the business. Warburg Pincus financed the deal with £150m in cash and £130m of debt.

Warburg Pincus will use its US$15bn Warburg Pincus Private Equity X fund to finance the transaction.

Survitec has grown significantly under the ownership of Montagu as is evidenced by the completion of three strategic bolt-on acquisitions which have been integrated into the group.

The transaction is to be finalized in February but is still subject to regulatory approval. Montagu was advised by Rothschild, Deloitte and Hammonds. Warburg Pincus was advised by Close Brothers Corporate Finance and Ernst and Young on financial matters and Clifford Chance provided legal services.