Bain sells Brakes for $3.1bn

The deal marks a full exit for Bain after an eight-year investment. Contacted by unquote", the private equity firm did not disclose the IRR and money multiple generated on the deal.

The transaction was valued at $3.1bn (£2.2bn) and included the repayment of debt worth $2.3bn. The purchase price, the refinancing of Brakes Group's debt and other fees and expenses are expected to be financed with new debt and cash from Sysco's balance sheet.

The transaction valued Brakes at 12x EBITDA, which amounted to £184m in 2015.

The acquisition will allow Sysco to expand in the UK, Ireland and the rest of Europe. As part of the deal, Brakes will operate as a standalone company within Sysco and the business will continue to be led by its CEO Ken McMeikan.

The deal is subject to customary regulatory review by the European Union competition authorities and the companies expect to complete the transaction before July 2016. At closing, the combined companies are expected to generate annual sales of approximately $55bn.

Sysco's management team is committed to expanding the business further through acquisitions and share repurchases, unquote" understands.

Previous funding
In 2002, CD&R delisted Brakes, then known as Brake Bros, from the London Stock Exchange with a £616.4m enterprise value. During the course of CD&R's five-year investment, two acquisitions were made and the company's fleet was modernised. CD&R was reported to have reaped a money multiple in excess of 3x when it later sold the business to Bain.

In June 2007, Bain acquired Brakes in a £1.3bn MBO from CD&R.

Company
Headquartered in London, Brakes is a supplier to the food service industry, with operational branches in the UK, Ireland, France, Sweden, Spain, Belgium and Luxembourg. The company was founded in 1958 and employes 15,000 people.

The group currently counts 50,000 customers, including pubs, restaurants, hotels, hospitals, schools and contract caterers. In 2015, Brakes generated £3.3bn in revenues, which marked a 6.5x increase on the previous year.

People
Bain Capital – Dwight Poler (managing director).
Brakes Group – Ken McMeikan (CEO).
Sysco – Bill DeLaney (CEO).

Advisers
Equity – Goldman Sachs International (financial due diligence).
Company (Brakes Group) – Baker & McKenzie (legal).
Company (Sysco) – Deutsche Bank Securities (corporate finance, financial due diligence); Freshfields Bruckhaus Deringer (legal); EY (commercial due diligence).

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