Arle raises ad-hoc funding for Innovia buyout

Amy King
28 April 2014

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Arle Capital and Electra Partners have acquired Innovia Group, formerly owned by the Candover 2001 Fund managed by Arle, in a deal that gives the firm an enterprise value of тЌ498m.

Arle has raised fresh capital from a syndicate of global investors to fund the transaction.

Electra invested €40m in the company, acting as a cornerstone investor in the deal.

For the Candover fund, the divestment represents a return of 2.1x money and an uplift of 3.5x money since Arle took over the Candover vehicle in 2009. The vehicle is now fully divested.

In August 2013, Arle hired Deutsche Bank to manage a sales process for Innovia. The GP hoped to raise around €500m for the asset.

Arle (then Candover) initially acquired the company in September 2004 in a management buyout worth €320m when the business was named UCB Films. In February 2013, Arle acquired the remaining 50% stake in joint venture Securency International from the Reserve Bank of Australia. Innovia previously owned a 50% stake in the company.

Arle refinanced Innovia and raised €340m via a high-yield bond issuance earlier this year.

Company
Innovia Group has two divisions: Innovia Films and Innovia Security.

Innovia Films produces biaxially oriented polypropylene and cellulose films at production sites in the UK, the US, Belgium and Australia. Products include labels and security films, overwrap and renewable and compostable films.

Innovia Security produces sophisticated banknote substrate, issued in 23 countries globally. In March this year, the firm signed a contract with the Bank of England to provide polymer substrate for the next-generation £5 and £10 notes.

The group is headquartered in Wigton, Cumbria, and employs 1,600 staff.

People
Richard Booth is an investment director at Arle. Bill Priestley is a partner at Electra and joins the Innovia board. Alex Fortescue is chief investment partner at Electra and also worked on the deal alongside Owen Wilson.

Advisers
Equity - Deloitte, Richard Bell, Daniel Wright, John Williams (Financial due diligence); White & Case, Ian Bagshaw (Legal).