Blast from the past

Texas Pacific Group et al. buy TDF for EUR4.9bn

A syndicate of investors led by US-based Texas Pacific Group (TPG) and including AXA Private Equity (AXA PE), has backed the secondary buyout of Europe's largest telecom and broadcasting transmitter, Telediffusion de France (TDF), in a deal that values the business at EUR4.9bn.

BNP Paribas, Merrill Lynch, Citigroup, HSBC and Morgan Stanley were mandated to underwrite the EUR3.9bn debt, a leverage of 8.7x. Charterhouse and CDC Entreprises, which purchased the company in 2002, have retained a 40% stake in the company (January 2007, Issue 77).

CDR leads EUR3.7bn buyout of Rexel

Clayton Dubilier & Rice has led the EUR3.7bn buyout of Pinault Primtemps Redoute's (PPR) shares in electrical distributor Rexel. CDR will take 36.5% equity, joined by Eurazeo and Merrill Lynch Global Private Equity (MLGPE), which have respectively agreed to take a 35.6% and a 25.7% equity stake. The consortium is also making a compulsory offer to buy Rexel's remaining shares. Rexel was introduced onto the Paris Stock Exchange in the Second Marche in 1983. PPR acquired its 73.45% company shareholding in 1990. The remaining shares are still listed. The company has an enterprise value of EUR3.8bn and total equity shares worth EUR2.6bn.

The senior debt in support of the deal is being arranged by JP Morgan, Morgan Stanley, Royal Bank of Scotland, HSBC and Merrill Lynch. Paris-based Rexel was founded in 1967 as CDME and was renamed in 1993. The company is a world leader in the distribution of electrical parts and supplies, focusing on manufacturers and practitioners in the construction, maintenance and renovation industries (November 2004, Issue 54).

Wendel. KKR et al. purchase Legrand for EUR3.63bn

Wendel Investissement and Kohlberg Kravis and Co. (KKR) have led the acquisition of Legrand from Schneider Electric for EUR3.63bn. Wendel Investissement and KKR both invested EUR658.5m, WestLB provided EUR200m, HSBC Private Equity invested EUR115m, and Goldman Sachs Capital Partners provided EUR100m. The Verspieren and Decoster families, the founders of Legrand, also invested EUR29m. A EUR150m vendor loan has been provided by Schneider Electric. The EUR2.43bn new external debt package comprises EUR1.82bn of senior debt and EUR600m of mezzanine financing.

Originally, Brussels vetoed a merger between Schneider and Legrand in 2001 for violating European anti-trust regulations. The commission then ordered the sale of the 98% interest acquired by Schneider before the end of 2002. Consequently, in August 2002, Schneider agreed to sell Legrand to Wendel Investissement and KKR. Wendel Investissement and KKR refloated Legrand in 2006 and conserved a 60% stake (January 2003, Issue 36).

Charterhouse buys majority stake in Vivarte for EUR3.5bn

Charterhouse has acquired a majority stake in the secondary buyout of clothing and shoes distributor Vivarte from PAI partners and Sagard in a transaction worth around EUR3.5bn. Following the deal, previous investors PAI partners and Sagard will realise their entire stakes (of 65% and 10% respectively), while the Descours family and management will retain significant minority equity shares.

George Plassat, the group's CEO from 2000 to December 2002 who PAI invited to participate in the buyout, is also investing significantly in the newco. Management will reportedly hold around 15%. In February 2004, PAI partners purchased 54% of Vivarte in a deal that valued the business at EUR1.5bn. Sagard's investment in the newco gave it a 10% stake in the group.

Vivarte is a shoe and clothing retailer with more than 30,000 sale points worldwide and around 22,000 staff. Brands managed by the group include Kookai, La Halle!, Minelli and Naf Naf (February 2007, Issue 78).

KKR, Goldman buy majority of PagesJaunes for EUR3.312bn

KKR and Goldman Sachs Capital Partners have purchased a 54% stake in directory business PagesJaunes from France Telecom, for EUR3.312bn.

The deal valued the whole business at EUR6.133bn, approximately 14x its EBITDA. The debt package was valued by sources close to the deal at around 10x PagesJaunes' EBITDA.

Senior debt was underwritten by BNP Paribas, Lehman Brothers and Deutsche Bank, while the mezzanine will be provided by Goldman Sachs. The total amount to be invested by Goldman Sachs in equity and mezzanine is believed to be equal to the amount KKR is to invest in equity. Sevres-based PagesJaunes publishes directories and is currently increasing its internet activity (January 2007, Issue 77).

Starwood buys Taittinger, Societe du Louvre in EUR2.6bn deal

Starwood Capital has purchased a majority of Taittinger and Societe du Louvre in a deal worth EUR2.6bn. The French champagne producer Taittinger previously owned a 44% holding in hotel operator Societe du Louvre. The US private equity house offered Taittinger's investors EUR336.24 a share, equating to an equity value of EUR1.166bn for 100%. The sale of Societe du Louvre was made at EUR147.06 for each share, representing an equity value of EUR1.691bn.

Altogether, Starwood Capital took a 65% equity stake in Societe du Louvre and a 65% interest in Taittinger (September 2005, Issue 64). Starwood sold the champagne business for EUR660m in June 2006 to Credit Agricole Nord-Est. Credit Agricole Nord-Est then reduced its equity to 36% in a partial exit from Taittinger in a deal which saw the family take back 41% of the equity and increased its voting rights to 47% (February 2008, Issue 88).

In 1734, Jacques Fourneaux, a merchant of champagne wines, established the company that would later become Taittinger. The Taittinger family gained control of the world's sixth largest champagne maker in 1932. Societe du Louvre, which first listed shares in Paris in 1930, became part of the family's holdings in 1954 when Pierre Taittinger bought stock and later became chairman. Societe du Louvre owns and operates a unique collection of 14 luxury hotels with over 3,000 rooms in France, Switzerland and Germany, including Crillon, Lutetia, Martinez, Hotel du Louvre and Concorde La Fayette.

Eurazeo buys 100% of Europcar for EUR3.08bn

Eurazeo has purchased Europcar, a European car rental company, from Volkswagen AG for EUR3.08bn. Calyon, BNP Paribas, Societe Generale and Deutsche Bank will underwrite the senior debt.

Europcar, headquartered in Paris and founded in 1949, was originally purchased by Renault in 1970 and then was sold to Wagon-Lits in 1988. The latter subsequently disposed of 50% of its stake to Volkswagen in the same year, which acquired the remaining shares in 1999.

Europcar has a fleet of more than 215,000 vehicles around the world (April 2006, Issue 70).

BPE partially exits Converteam

Barclays Private Equity France has staged a partial exit of Converteam in a deal valued at around EUR1.9bn. LBO France took a third of the company alongside the management, who also took a third, while Barclays PE reinvested with its fund Barclays Private Equity European Fund III in order to also retain a third of the equity. Barclays PE however exited its original investment from its second European fund.

Barclays PE purchased the company, formerly called Alstom Power Conversion, from Alstom in November 2005 in an MBO deal worth EUR150m. A staple financing of around EUR900m was agreed between HSBC, Lehman Brothers, Natixis, Societe Generale and Royal Bank of Scotland. Massy-based Converteam is a power conversion and engineering company, which manufactures rotating machines, converters and drives for the marine, oil and gas and offshore energy industries. Its origins date back to the late 1800s and early 1900s, however its current shape took form under Alstom's ownership in the early 1990s. The name Converteam was established at the time of the sale of the division by Alstom to Barclays PE. The company has 4,600 employees in 14 countries worldwide and recorded an 80% increase in orders to a value of EUR1.43bn for 2007 (August 2008, Issue 94).

Eurazeo buys Elis from PAI for EUR2.276bn

Eurazeo and its LPs have backed the tertiary buyout of textile and hygiene business Elis, in a deal valuing the company at EUR2.276bn, or 10.3x the company's LTM EBITDA at the end of June 2007. The buyout house invested EUR393m in equity, while ECIP, a co-investment vehicle for Eurazeo's LPs, injected EUR75m. Eurazeo and ECIP together own 98% of Elis, 16.3% of which is held by ECIP. BNP Paribas underwrote a EUR1.85bn debt package.

Previously, PAI acquired Elis, the textile rental company, in a secondary buyout from BC Partners for EUR1.5bn. BC Partners originally acquired Elis in 1997 in a deal worth EUR936m. Elis, based in Puteaux, provides a range of continued services in cleanliness, corporate image, hygiene and environment, including the rental and cleaning of work wear, flat linen and mats, and the provision of well being services such as restroom services and beverage dispensers (water coolers and espresso coffee machines). The group's clients are notably in the services, hotels, restaurants, healthcare facilities and administrations sectors (January 2008, Issue 87).

Wendel in EUR2bn tertiary buyout of Materis

Wendel Investissement has backed the tertiary buyout of Materis from LBO France for EUR2.07bn. The industrial materials group has an enterprise value of EUR2bn, which is equivalent to 8.5x its EBITDA in 2005. Wendel and the company's management invested EUR420m of equity. The assumed EUR1.6bn debt component of the transaction is purportedly some EUR200m less than Eurazeo had put in place ahead of a deal. Eurazeo was offered a price based on a EUR2.12bn valuation. Despite gaining exclusivity last December, the group was later forced to back out, due to a lack of agreement on the management package. Wendel made an offer 24 hours later, leaving the management some 20% of the capital. Its offer was EUR60m less than the offer made by Eurazeo. Calyon, Mizuho and BNP Paribas provided the debt of EUR1.67bn, 6.9x the company's EBITDA.

Materis, based in Issy-les-Moulineaux, produces speciality chemicals for the construction sector, as well as in decorative paints, mortar, calcium aluminates and adjuncts for concrete and cement (May 2006, Issue 71).

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