TD Capital Communications Partners targets European TMT sector

Despite negative sentiment within the TMT sector and the influx of US capital into the market, TD Capital Communications Partners (TDCCP) continues to be confident that there is a healthy flow of investment opportunities within Europe. The group, which set up its dedicated European team in June 2000, has a $500m fund pool at its disposal, dedicated to the media and communications sectors in both the US and Europe. It is understood that the team may look to embark on its debut external fundraising programme in the next 12-18 months.

TDCCP was founded in 1995 and is an investment group of TD Capital, the global private equity arm of TD Securities. Having established a good-sized portfolio in the US, the group moved to reinforce its European activities with the appointment of Jose Brena and Doug Rediker (managing directors) to head a new London office.

Prior to joining TDCCP, Brena spent 13 years at GE Capital, while Rediker was a former executive director at Lehman Brothers (Europe). TDCCP’s London team also includes Mark Kelly (director), Kirsten Rosenbaum (director) and Timothy Demchenko and the group will look to build the team to seven in the next two months.

The European team is looking to make four or five investments per annum, preferring investments in the Euro 25-50m range, generally leading or co-leading its deals; it will seek to acquire equity stakes in the 25-50% range. TDCCP has a flexible mandate and will back companies throughout all stages of their development, from early-stage and expansion capital through to buyouts and industry consolidations; the team expects to see lots of opportunities for second and third round expansion financings in 2001.

The team works closely with its portfolio to add value by assisting in strategic decisions, raising additional funding and negotiating acquisitions. TDCCP expects to participate in follow-on rounds of funding in the majority of cases.

The European and US teams work closely, cross-leveraging experience of their respective markets, which are evolving in very different ways. For example, the European market is more advanced than the US in the field of wireless technology and related enabling technologies, while the US far outweighs Europe in broadband technology. So far the team has completed three transactions, including a strategic investment in Amadeus Capital Partners’ second fund (Amadeus II). The other two deals involved the second round of financing of Goyada, a Swedish wireless services company, and the start-up financing of London-based OnCue Telecommunications, a broadband service provider.

It is reported that the team currently has two deals close to completion: a UK start-up involving the creation from scratch of a greenfield cable company; and the buyout of a Continental European communications company, which is being led by a CEO who has previously been backed by Jose Brena during his time at GE Capital; the group is taking a minority position in the deal.

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