Candover completes innovative sponsor switch

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In an unusual deal, sometimes known as a portable recap, Candover has acquired between 50-60% of corporate cost-reduction advisory business Alma Consulting, from its previous backers Apax Partners SA and Chequers Capital.

This transaction's originality lies in the fact that no new senior debt will be provided. Royal Bank of Scotland, the company's current agent and arranger of the company's existing debt, only underwrote additional mezzanine and capex facilities. Alma Consulting had been subject to a EUR350m refinancing at the end of June 2007. Currently, the newco still holds more debt than equity, but the gearing is significantly lower than was typically the case before the credit contraction. Candover may recapitalise the business when the debt market recovers.

Founded in 1986, Alma Consulting provides advisory services aimed at reducing social costs, tax-related costs, operating costs and innovation financing. The firm, which makes its revenues from success fees, saw its turnover jump from EUR67.5m in 2004 to EUR153m in 2006, and is expecting the figure to exceed EUR180m in 2007. The group's 10,000 clients include 60% of France's 200 largest companies and 35 of the CAC40-listed groups.

Chequers originally invested in the company in 2001, after its separation from parent company PRG. In December 2005, in a deal valuing the company around EUR400m, Apax backed the company's secondary buyout, while Chequers reinvested in exchange for a minority stake. (Page 39).