Epiris sells Innovia to CCL in CAD 1.13bn deal

Kenny Wastell
20 December 2016

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Epiris has sold Innovia Group, a supplier of films and chemicals used in the manufacturing of banknotes, to Toronto-listed trade buyer CCL Industries in a CAD 1.13bn deal.

Epiris (until recently known as Electra Partners) will receive proceeds of £106m from the deal, which represents an uplift of 32% on the company's NAV as of September, according to a statement issued by Epiris.

The figure represents a return of 3.2x for Epiris following a holding period of almost three years, equivalent to an IRR of 51%. The deal values the business at around 7.3x its anticipated 2017 EBITDA.

Under the GPs' tenure, the company has grown by expanding its manufacturing facilities – in particular those in Cumbria – as well as bolting on Australian high security ink supplier Barroven. In June this year, the company sold its Cellophane division to Futamura Chemicals for €75m.

The exit is the latest in a series of divestments by Epiris, as it approaches the end of its 12-month notice period as investment portfolio manager of listed LP Electra Private Equity. Earlier this week, the GP sold its stake in UK holiday park operator Parkdean Resorts to Onex in a deal worth £1.35bn.

The sale to CCL is expected to close in Q1 2017.

Previous funding
In September 2004, Candover 2001 Fund (which was later managed by Arle) invested in Innovia (then known as UCB Films) as part of a management buyout worth €320m.

In 2014, Epiris acquired the business from Candover in a deal giving the firm an enterprise value of €498m. Epiris invested €40m as part of the deal.

Company
Headquartered in Wigton, Cumbria, Innovia produces banknote substrate and films primarily used in the food and tobacco packaging industries. The firm currently provides polymer substrate for use in the new generation of £5 notes.

According to a statement issued by the trade buyer, the business is expected to generate a turnover of CAD 570m in 2017 with EBITDA of CAD 155m. Innovia operates from four manufacturing facilities in the UK, Belgium, Australia and Mexico.

People
Epiris – Bill Priestley (chief investment partner); Owen Wilson (investment director).
CCL Industries – Geoffrey Martin (president, CEO).

Advisers
Vendor – JP Morgan (corporate finance).