Domestic & General Group Plc (United Kingdom) - Dec 2007

unquote
01 December 2007

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Advent International has backed the £523.9m public-to-private of specialist warranty provider Domestic & General Group Plc (D&G). D&G was formerly listed on the London Stock Exchange before it was approached in early September 2007 and delisted on 6 December 2007 via a scheme of arrangement by Advent’s newco vehicle AIDG Jersey Acquisitions. The 1425p per share offer represented a market capitalisation of £523.9m. D&G was the first fully-financed public-to-private transaction announced in the UK since the liquidity crisis of mid-2007.

Company

D&G is a specialist provider of extended warranty plans for domestic electrical goods. The company provides insurance cover for more than six million appliances for 4.2 million customers. D&G uses a full range of direct marketing techniques to market extended warranties for the majority of the major white and brown goods manufacturers in the UK, including brands such as Electrolux, Hotpoint, Bosch, Sony and Hoover. The company operates in both the B2C and B2B spaces. The Wimbledon-headquartered business also has an expanding international presence with established relationships in Germany, Spain, France, Poland and Australia. To 31 March 2007, D&G generated operating profits of £19m on revenues of £304.6m. Advent expects D&G to demonstrate growth in the UK extended warranty market, driven by the increasing sales of insurable products, including flat screen TVs and also via expansion in Europe. Compared with the UK, the market for extended warranties in continental Europe is significantly under-developed. Central and Eastern Europe is particularly attractive, with strong growth in appliance sales and lower disposable incomes resulting in a risk-averse attitude to product failure.

People

John Singer represented Advent International on the deal.

Advisers

Company - Collins Stewart, Chris Wells (Broker)Company - Hawkpoint, Lawrence Guthrie, Sunil Duggal (Corporate Finance)Company - HSBC, Anthony Bernbaum, Julian Gray (Corporate Finance)Equity - Freshfields Bruckhaus Deringer, Chris Bown, Jonathan Cooklin, Neil Falconer, Rob Stirling (Legal)Equity - Goldman Sachs, Paul Miller, Richard Campbell-Breeden (Corporate Finance)

Sourced from: UK & Ireland unquote" 361 (Jan 2008)