BC Partners acquires Phones4U in SBO

Although the value of the deal has not been disclosed, it has been widely reported to be in the region of £600-700m. The investor was introduced to the deal after an auction process was launched in the middle of 2010, in which BC Partners was the sole remaining bidder in December. A price could not be agreed upon at the time and the investor walked away. An agreement was reached a few months later.

BC Partners was attracted to the deal because it believes the business has a strong brand and potential for growth as a result of the growing smartphone market. The investor is looking to support the company's current growth strategy, concentrating on the smartphone market and younger demographic. Other sales channels will also be looked at.

Equity for the transaction has been provided by the BC European Capital VIII fund.

Debt
A high-yield bond was launched to support the financing of the transaction.

Previous funding
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.

Reports of a potential sale surfaced in September; however, the sale was called off in December with Providence claiming they could realise the most value through continued ownership.

A return on investment has not been disclosed.

Company
Phones4U is a mobile phone distributor and has a network of more than 500 stores in the UK. The company is based in Newcastle under Lyme and supplies all major network and handset brands. In 2010, Phones4U reported sales of more than £900m

People
Andrew Newington, Jamie Rivers and Jonathan Hosgood worked on the deal for BC Partners.

Advisers
Equity – Global Leisure Partners (Corporate finance); Goldman Sachs (Corporate finance).
Vendor – Deutsche Bank (Corporate finance).

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• Topics
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