Covion Ltd (United Kingdom) - Nov 2007

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01 November 2007

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Foresight Group and Octopus Private Equity have recouped 4.4x their investment and an IRR of 84% from the sale of Covion Holdings Ltd. The facilities infrastructure services company has been acquired by trade player Balfour Beatty Group Ltd for a total consideration of £33m. “The auction process for Covion was very competitive with a significant number of offers made,” commented Jon Breach, M&A partner at BDO Stoy Hayward, who ran the auction for the vendors. There were upwards of 10 offers made in the first round before the bidders were narrowed to five for the second round. Both private equity and trade buyers were among the contenders in the final round. The sale process had initially been prompted by private equity interest which convinced Foresight and Octopus that the time was right to divest the asset. “Covion is an excellent strategic fit for Balfour Beatty and this combined with the cultural fit of the two businesses and the fact that it was understood that Balfour Beatty had significant cash available for acquisitions helped it to win the deal,” Breach explained. “We knew that strategic prices had been paid in this sector,” said Andrew Cavaghan, who led the exit for Octopus. “And due to the contracted revenues-nature of the business we were able to realise value ahead of those contracts playing out.” Covion grew at a rate above the expectations of the investors, with profits growth at a compound rate of 112% over the past four years. Theale-based Covion was founded in 2000 and is projected to have a turnover of £33m to 31 December 2007. It provides integrated facilities solutions to blue-chip customers across corporate and manufacturing facilities throughout the UK. Since 2005 new customers have included Britvic, Domestic & General, Archant and Tate & Lyle. “Covion is a great example of a private equity success story and has generated substantial returns for Foresight,” added Donald Maclennan, who led the deal fo

Advisers

Purchaser - Berwin Leighton Paisner, Angela Bourton, Keely Hibbitt, Rob Salter (Legal)Vendor - BDO Stoy Hayward, Angela Haygarth, Harry Stoakes, Jonathan Breach, Nicola Lyons (Corporate Finance)Vendor - Osborne Clarke, Andrew Overend, Helen Porter, Keir Barrie (Legal)