Haversham picks up CD&R’s BCA for £1.2bn

The deal saw CD&R receive £701m in cash and £104m in stock. It follows plans to list the company towards the end of last year. The plans were said to have been scrapped due to volatility in global equity markets.

Haversham is an AIM-listed vehicle set up by Avril Palmer-Baunack and Marwyn Value Investors with the intention of buying one or more businesses through a reverse takeover, in order to create a platform for further investments.

Haversham has financed the BCA acquisition through the placing of 685.7 million ordinary shares priced at 150 pence each, in order to raise £1,028.5m.

According to Palmer-Baunack, there are exciting growth opportunities in the European used vehicle market and Haversham will refresh BCA's strategy to ensure continued growth. Haversham believes that as more consumers buy cars through PCP financing schemes, this will drive greater volume through BCA's auction channel.

Cenkos Securities and Zeus Capital acted as joint brokers for the deal.

Previous investment
CD&R acquired BCA in December 2009 in a deal thought to be worth £390m from previous backers Montagu Private Equity. CD&R invested via its $5bn Clayton Dubilier & Rice Fund VIII. According to unquote" data, Montagu purchased the company for £450m in 2006.

CD&R supported BCA's acquisition of WeBuyAnyCar.com in August 2013.
According to CD&R, BCA has seen its EBITDA increase by around 85% under the GP's stewardship.

Debt
A £200m term loan facility has been provided by HSBC to support the deal, as well as a £100m revolving credit facility earmarked for refinancing existing debt.

Company
BCA operates Europe's largest second-hand car marketplace in terms of number of vehicles sold and revenue. The company is active in 12 countries across Europe. BCA operates through two divisions: vehicle remarketing and vehicle buying.

Vehicle remarketing focuses on used cars, providing an exchange between vendors and buyers through both physical and online auctions. It generates revenue through transaction fees, as well as fees generated though a range of extras including pre- and post-auction services such as inspections, logistics, repair and valet services. The division generated revenues of £293.5m in 2013 and EBITDA of £61.7m. For the first six months of 2014, the division generated £165.6m of revenue and £36.4m of EBITDA.

The vehicle-buying division trades as WeBuyAnyCar.com (WBAC). WBAC buys used cars directly from public sellers in the UK and the Netherlands, before selling the vehicles on through its remarketing division. For the first six months of 2014, the division generated revenue of £292.8m and EBITDA of £8.7m.

The group's combined revenue for 2013 was £442.3m and EBITDA stood at £62.5m. The company is expected to report an £886m turnover and EBIDTA of £80m for 2014.

People
Avril Palmer-Baunack is the chairman of Haversham. Spencer Lock will continue in his role as managing director of the company following the deal. Jon Olsen, previously CEO of BCA, will step down from the company's board of directors following the deal, having been with the company for 12 years. BCA finance director Simon Hosking will also leave the board following the transaction.

David Novak is a partner at CD&R.

Advisers
Equity – Merrill Lynch (Debt advisory); Berwin Leighton Paisner, Benjamin Lee (Legal).
Management – Travers Smith, Chris Hale, Adam Orr (Legal).
Vendor – Clifford Chance, Simon Tinker (Legal); Debevoise & Plimpton (Legal); EY (Financial due diligence). 

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• Topics
• UK / Ireland
• Exits
• Clayton Dubilier & Rice
• Montagu Private Equity
• United Kingdom
• Unq2015Apr