Electra to reap 15x on Allflex

The sale of Allflex to BC Partners will generate a gross return of 15x original cost over 14 years of investment and an IRR of 28% for Electra.

The total gross proceeds for Electra and its investors are $630.5m, including $398m which will go to Electra Private Equity PLC (total cumulative proceeds for investors, including refinancings, amount to $835m).

It is believed that BC Partners outbid fellow firms Astorg Partners, Bain Capital, Blackstone, Carlyle, Charterhouse, Hellman & Friedman, KKR, Ontario Teachers' Pension Plan, Omers and PAI Partners in its pursuit of the French animal identification tags business which Electra acquired in 1998.

The strong interest in the business is believed to have sprung from a renewed call for the traceability of livestock following the horsemeat scandal as well as the increase in meat consumption, notably in emerging markets.

BC Partners plans to support Allflex's further international growth on the back of strong demand for its products and the ongoing professionalisation of the industry, it said in a statement. The firm invested from its new fund.

Electra Partners and Allflex were advised by Rothschild.

Debt
Press reported in March that debt packages of around $650–700m, or 6.5–7x EBITDA, were being arranged to support the deal. 

Previous funding
Electra first invested in Allflex in 1998, when it backed the $160m SBO of the company with $46m. The GP bought the business from Goldman Sachs Private Equity New York and received mezzanine backing from Intermediate Capital Group and the Royal Bank of Scotland. Electra refinanced the business in 2005 and 2007.

The GP acquired Allflex in the wake of the BSE crisis, which sparked tougher regulations on food traceability in the EU. To capitalise on this increasing demand, Allflex introduced new products, extended tagging to more species, and expanded into new geographical markets such as China and Africa. The company grew organically and also made acquisitions during the holding.

Company
Allflex manufactures plastic and electronic animal identification tags. The company has factories globally, including in France, Brazil, Poland and China, and generated a turnover of $259.4m in 2011.

Allflex's origins date back to 1955 in Palmerston North, New Zealand, when it was founded by John Burford under the name Delta Plastics. The business was acquired by French company SFII in 1989. It then circulated among various private equity players including BNP Paribas Private Equity and Goldman Sachs.

People
Electra's David Symondson and Rhian Davies were responsible for the investment in Allflex. BC Partners worked on the deal across its French and German offices, involving partners including Ewald Walgenbach and Jean-Baptiste Wautier.

Advisers
Vendor – Rothschild (Corporate finance). 

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