Wood Mackenzie goes for £553m

In the largest European purchase by a private equity firm this year, troubled UK buyout house Candover has sold Edinburgh-based energy research and consultancy firm Wood Mackenzie to Charterhouse Capital Partners for £553m.

The agreed sale price came in almost £100m below the £650m price tag originally reported by the press. The sale will generate proceeds of £36.2m for its listed parent Candover Investments.

Following the £36.2m liquidity injection, Candover Investments will revalue its carried interest payments. The firm’s half year results, scheduled to take place this August, will reveal the impact this will have on the net asset value. Candover’s 2008 year-end valuation of Wood Mackenzie was £20.5m (9.2% of the NAV).

Charterhouse’s successful bid topped rival second round offers from Bain Capital, Hellman & Friedman and Warburg Pincus. Initial interest came from consultancies and trade rivals.

Rumors of the deal had been circulating for weeks before the announcement was made. The sale of Woods Mackenzie will provide welcome relief for Candover and its parent Candover Investments that is also in talks about a takeover or stake sale.

Candover first acquired a 43% stake in Wood Mackenzie in 2005 in order to facilitate its growth plans and two years later became the majority shareholder. The consultancy firm has generated an IRR of 56% prior to any further proceeds.