Cabot Square reaps 12x on £160m Equitix sale

Ellie Pullen
23 October 2014

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Cabot Square Capital has generated a 12x return on the sale of Equitix, an investor and manager of infrastructure assets, to a Tetragon Financial Group subsidiary for an enterprise value of ТЃ159.5m.

According to Tetragon, the enterprise value is representative of an approximate 5x multiple of the company's estimated 2015 EBITDA.

Tetragon is acquiring an 85% stake in the business, while the company's management will retain the balance.

The sale price could be increased by up to £15m, subject to whether the company outperforms its business plan over the next two years. Any increase in price would be payable in early 2017.

Cabot established Equitix in 2007. The sale of the business comes just months after Cabot announced the sale of healthcare investment manager MedicX Group to Octopus Investments, generating an 18x return.

In July, the firm invested £25m in UK SME finance provider Henry Howard Finance for a controlling stake in the business. In June last year, Cabot generated a 5x return through the sale of Key Retirement Solutions to Phoenix Equity Partners.

Tetragon is a Guernsey-based closed-ended investment company that trades on the Euronext Amsterdam. Its two business areas are asset management and an investment portfolio.

Company
Founded in 2007 and headquartered in London, Equitix is an investor, developer and manager of infrastructure assets. Its investment management division manages more than £1bn in funds.

The company claims to have won and closed 20 infrastructure projects and to have raised £3bn in debt and equity since its inception.

Equitix employs 50 staff, all of whom it is expected will remain following the acquisition by Tetragon.

People
Geoff Jackson is the CEO of Equitix. Keith Maddin is a partner at Cabot and sat on Equitix's board of directors as a non-executive director.

Advisers
Vendor – Lazard (Corporate finance).