CVC buys Ista back from Charterhouse

CVC bought Ista for €3.1bn six years after selling its majority stake to Charterhouse for €2.4bn, including debt. Ista's management also retained a minority stake in the company.

Ista has grown in value by €2.2bn since CVC first invested and it is likely to benefit from further growth spurred by a European Union directive requiring companies to charge customers only for energy they actually consume.

CVC's move to bid was somewhat surprising, however, as the GP was reportedly still mulling a sale of its 24% stake in Ista in December last year when, together with Charterhouse, it hired Deutsche Bank and Goldman Sachs to lead the sale process. Earlier this week, the auction was said to be dying out given a lack of bidders.

CVC did not participate in first round bids for the business but moved in quickly after French investors Axa Private Equity and Wendel dropped out, leaving BC Partners the only remaining bidder, according to media reports. It proceeded to outbid BC Partners, which is believed to have valued the business at less than €3bn. 

The closing of the transaction is expected to take place by mid-year and CVC plans to hold on to the asset for about five years, according to news agency Reuters.

CVC acquired Ista, then Viterra Energy Services, from Eon for €930m in 2003. It sold the business to Charterhouse after four years of holding but reinvested some of its proceeds for a minority stake.

CVC invested in the business from its fifth fund second time round but had held its previous investment with fund four, meaning the GP will receive carried interest on the sale twice (from the 2007 and 2013 transactions).

Debt
CVC is funding the deal with around €1bn in equity and approximately €2bn in debt, which is being provided by Deutsche Bank but is expected to be syndicated to other banks and institutional investors at a later stage. 

Previous funding
Charterhouse acquired Ista from CVC for €2.4bn in 2007. The company's enterprise value had grown by almost €1.5bn (1.5x) in the four years prior to the SBO, bolstered by a number of acquisitions, however it has grown by a comparatively low €700m in the six years since. 

Ista expanded on the global energy management services sector over the past few years and is often a key partner for reducing CO2 in the building sector, according to the GP.

The company has energy metres installed in 11 million flats and commercial sites and posted sales of €701m in 2012, €100m more than in 2006, employing 4,600 staff in 26 countries. In 2011, Ista's EBIT stood at €186m.

Company
Ista is an energy metering business founded in 1902 and based in Essen. The company offers services to property managers and owners as well as energy utilities ranging from the supply and installation of devices, to consumption metering as well as the billing and analysis of energy data. The business also develops energy management solutions.

People
Marc Strobel is a partner at CVC. 

Advisers
Equity – Ernst & Young (Tax); Hengeler Mueller, Hans-Jorg Ziegenhain, Emanuel Strehle, Christian Schwandtner, Thorsten Mager (Legal).
Vendor – Deutsche Bank (Corporate finance); Goldman Sachs (Corporate finance); Freshfields, Oliver von Rosenberg, Ludwig Leyendecker, Simone Bono (Legal).
Debt – Allen & Overy (Legal).

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• Topics
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• Charterhouse Capital Partners