UK - Charterhouse acquires Candover's Wood Mackenzie for £553m

The sale will generate total proceeds of £36.2m for Candover, which comprises of cash proceeds worth £19.6m (with the potential for further proceeds of £1.9m under a deferred consideration scheme), and an additional cash payment of £16.7m as a result of the crystallisation of carried interest payments from the Candover 2001 Fund. Candover had valued the business at £20.5m at year-end 2008.

As a result, Candover's carried interest entitlements will be revalued and an update of the effect this will have on net asset value will be announced on 21 August with the 2009 half-year results.

The sale will be the UK's biggest leveraged buyout this year and would give Candover enough capital to avoid breaching its banking covenants. Proceeds from the transaction could also give ailing Candover some leverage when reviewing its options to stay afloat, which include an outright takeover, a minority stake sale or a fundraising.

UK-based Wood Mackenzie is a provider of research and consulting services to the global energy industry covering the upstream oil and gas, oil refining and downstream, gas and power generation and coal sectors in 93 countries. In 2008, the company extended its consulting and research activities into mining and metals via the acquisition of Brook Hunt. The business employs 600 staff, and achieved sales of £97m and profits of £38m in 2008, compared to previous year figures of £78m and £29m.

Candover first invested in Wood Mackenzie in 2005. While the value of the deal remained undisclosed, it was reported that Candover committed about £50m in exchange for a significant minority stake in the business. The deal was structured as a buyout in order to finance the growth of the company into its next stage, with HBOS providing a debt package to support the transaction. In 2007, Candover became the majority shareholder of the company in a follow-on transaction.

Wood Mackenzie has generated an IRR of 56% prior to any further proceeds. Candover's 2001 Fund has now fully realised eight of its 16 investments, giving a multiple of 3x money and an IRR of 47% to date.

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• Buyouts
• UK / Ireland