Nordic Capital closes Fund VII on EUR4.3bn

22 January 2009

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Fund

Nordic Capital (NC) has closed its seventh fund, securing EUR4.3bn in total commitments. The PPM was sent out in November 2007, and a first close was held in December the same year. Since then the fund has had a rolling close.

Lifespan, terms and conditions are described as industry standard. The only significant change from previous funds is that the mandate now allows for investments outside Europe, particularly in the healthcare sector where the investor has their best track record. White & Case, together with Jersey-based Mourant du Feu & Jeune, provided legal advice.

Investors

The fund attracted commitments from a range of international investors, with US investors contributing 35%, European 30% and Nordic 15% of the total commitments. The remainder came from investors based elsewhere globally. Subscriptions came from both new and existing investors, including public and private pension funds, insurance companies, endowment funds and funds-of-funds.

Investments

The buyout fund will concentrate on large- to medium-sized companies in the Nordic region and Europe. The vehicle will continue the firm's strategy of focusing on the healthcare and traditional industry and services sectors. Three investments have been made from the fund to date; the secondary buyout of SafeRoad from Reiten & Co; EDB Gruppen, which was delisted earlier this year; and US-based wound therapeutics and ostomy care products provider, ConvaTec. The latter was made possible by the extended geographical scope of investments. Nordic Capital expects to make 12-15 investments from Fund VII.

The ConvaTec investment, valued at $4.1bn, is NC's largest transaction to date. The deal was done together with Avista Capital Partners, a New York-based private equity firm. According to reports it was completed with 50% equity, and a debt package was provided by a consortium of investors (Nordic unquote", June 2008, page 10). However, for the majority of future investments, the GP will continue the Nordic approach with relationship banking, whereas for the largest deals, such as ConvaTec, loans from a syndicate of banks are expected. Future investments will be considered on a deal by deal basis with respect to debt providers and equity/debt ratio.

People

In conjunction with the new fund, Nordic Capital has opened new offices in Oslo, Frankfurt and London in addition to its existing offices in Stockholm, Copenhagen and Helsinki. Three new partners joined the firm in 2008: Tom Vidar Rygh was appointed in March and leads investment activity in Norway; Lars Terney joined from BCG in July and focuses on Danish investments; and Sonke Bastlein, formerly McKinsey & Co, was hired in August. Bastlein heads the Frankfurt office and is responsible for investments in the German speaking countries.

Name: Nordic Capital Fund VII

Closed on: EUR4.3bn November 2008

Focus: Buyout

Contact: Andrew Bennett

Address: Nordic Capital Limited, 26 Esplanade, St Helier Jersey JE2 3QA

Tel: + 44 (0) 1534 605100

Advisers

White & Case (Legal)

Mourant du Feu & Jeune (Legal).