Cinven has sold Wightlink, a ferry company serving the Isle of Wight, in a secondary management buyout worth GBP180 million. This gives the investor a return of just under three
times the original investment.
In a deal arranged by Royal Bank of Scotland’s Debt Ventures team, RBS Mezzanine is providing a GBP21 million mezzanine facility to buy out Cinven and other shareholders.
Mike Aitken, who led the original MBI and is the group’s chief executive, Adam Humphreys, finance director, and 14 managers have all increased their equity stakes in the business.
Cinven’s investment dates back to 1995 when it bought the company from Sea Containers in a GBP107.5 million management buy-in. The original deal comprised mezzanine and senior debt, provided by Intermediate Capital Group and Royal Bank of Scotland, and GBP34 million in equity.
The private equity investor has worked with Wightlink to improve operational performance
and services and to increase revenues.
Mike Aiken said: “We have been supported admirably by Cinven over the past six years and are now delighted to be able to move forward on a solid financial footing under management ownership.”
The company has invested GBP15 million to finance the purchase of two new high-speed passenger catamarans and the fleet’s GBP11.5 million flagship, the St Clare. The debt and equity in the deal was restructured in 1999 when Barclays Capital issued GBP135 million BBB rated secured bonds. The 25-year bonds are still in place.
Sealink UK, the owner of the ferry operation, was de-nationalised in the 1980s and subsequently sold to Bermuda-based Sea Containers. In 1990, Stena Line bought Sealink British Ferries, but the Isle of Wight ferries remained with Sea Containers, which renamed the company Wightlink. It is now one of the UK’s largest independent ferry companies, running three cross-Solent routes served by a 12-strong fleet. The company’s Portsmouth to Fishbourne route carries more than half of all traffic to and from the Isle of Wight. Last year the company transported 1.11 million cars and 5.33 million foot passengers and generated an annual revenue of approximately GBP40 million.
Ernst & Young and Dickson Minto advised.