Benelux: Foreign investors boost higher value activity

In keeping with the swelling ranks of portfolio companies flocking to the public markets across Europe, GS Capital Partners and TPG Capital are reportedly eyeing up a flotation for Ontex. According to local reports in early May, the Belgian producer of baby and feminine care products could be looking to raise up to €500m, with its private equity backers selling down half of their stakes in the business.

GS Capital and TPG acquired Ontex in July 2010 for €1.2bn – the largest ever buyout in Belgium at the time, having just overtaken Candover's take-private of the same business in January 2003 for a little more than €1bn.

Also setting up camp for an eventual flotation is ING subsidiary NN Group, which received a substantial €1.275bn investment from an investor consortium in May ahead of its upcoming IPO.

AsiaNN investors
Asian private equity firm RRJ Capital, Singaporean sovereign wealth fund Temasek and the Temasek-owned SeaTown Holdings International agreed to pour a total of €1.275bn through a series of tranches into NN.

RRJ is committing a total of €750m to NN – the most of the three investors. Alongside Temasek and SeaTown, the private equity firm will purchase €88m of shares in NN's IPO as part of a €150m subscription, with Temasek and SeaTown supplying the balance of €50m and €12m respectively.

The main chunk of the investment will be supplied as cash in exchange for €1.125bn of subordinated mandatory convertible notes with a 4% coupon, which were set to be issued to the firms sometime in May. The notes will be converted into NN shares over three tranches, the first of which will take place at the time of NN's IPO.

Brit's abroad
Meanwhile, Amsterdam-based Brit Insurance listed on the London Stock Exchange in April with a market cap of £960m. The insurer is backed by CVC and Apollo Global Management, which, alongside company management, sold 100 million existing shares at a price of 240 pence apiece, meaning gross proceeds for the selling shareholders totalled £240m prior to any exercise of the 10-million share overallotment option.

Lastly, TDR Capital is believed to be the foreign private equity fund that acquired the Benelux- and France-based division of Israeli energy company Delek Group towards the end of April. The deal saw TDR purchase Delek Benelux for a total consideration of €355m, comprising two cash payments of €180m and a €175m vendor loan from Delek, with a 5% yearly interest rate and a maturity of five years and three months.

Recent activity highlights the appeal of the Benelux market to foreign investors and is in keeping with the findings from the unquote" European Buyout Review 2013, which noted that foreign GPs accounted for almost two thirds of the total number of investors that executed buyouts in Benelux last year. Of the 32 different investors, 20 were from outside of the region, with UK-based investors making up a third of the total figure on their own.

Earlier this year, Montagu Private Equity made its first foray into the Dutch market with the acquisition of Dutch Ophthalmic Research Center for an estimated €200m, while last year saw PAI partners buy Belgian airport lighting specialist ADB Solutions for an estimated €320m in March.

The recent investments from French players also highlight the potential for greater synergies between the Benelux region and its neighbour. At the end of last year, mid-market investor Argos Soditic announced the opening of its first Benelux office in Brussels, having identified an opportunity for complex transactions across the region.

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• Topics
• Benelux
• Buyouts
• Exits
• Goldman Sachs
• TPG Capital
• CVC Capital Partners
• Apollo Management
• TDR Capital
• Montagu Private Equity
• PAI Partners
• Argos Wityu
• Belgium
• Netherlands
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• Senior debt