BC Partners secures Phones4u dividend recap

Amy King
17 September 2013

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BC Partners is to receive a dividend payout after phone retailer Phones4u issued bonds worth £200m.

All proceeds are earmarked for paying the GP a one-off dividend. Goldman Sachs is to act as bookrunner on the sale of the five-year senior notes, which are to be listed on the Irish Stock Exchange. The company's net debt will rise from 2.2x EBITDA to 4x as a result of the transaction.

The GP bought the firm from Providence Equity Partners in April 2011 in a transaction valued at £600-700m. The investor was understood to have been the sole remaining bidder at auction in December 2010. A price agreement could not be reached, so the GP is believed to have walked away from the deal, returning some months later.

Equity for the deal was sourced through the BC European Capital VIII fund, and a high-yield bond was launched to support the transaction.

Providence and Doughty Hanson acquired Phones4u and its phone distribution arm 20:20 Mobile Group in August 2006 for £1.46bn. Providence retained the retail arm Phones4u while Doughty Hanson took control of 20:20 Mobile Group.