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Newgate to acquire Arle Capital Partners

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Newgate Private Equity is to acquire Arle Capital Partners, the fund manager of listed LP Candover Investments, for an undisclosed sum and will oversee the wind-down of its funds.

The development comes five months after it was revealed that the GP was initiating a liquidation process that was expected to complete by the end of Q1 2017.

Following the acquisition by Newgate, Arle will continue to manage the wind-down and will also manage its remaining investment in oil and gas services company Expro International Group. The portfolio company will be managed within a special purpose vehicle designed to reduce costs.

According to a statement, Newgate was acting as an external adviser to the advisory boards of the fund after Arle proposed a solvent liquidation in October 2016. The acquirer said it "explored a range of alternatives to the liquidation" and agreed with both the fund manager and its advisory boards that acquiring the firm itself would provide the most "beneficial and cost effective" option.

Candover announced in 2010 that it would no longer make new investments and would enter into a run-off period, during which it would continue to monitor the performance and viability of Arle.

Candover's NAV per share fell to 163 pence by the end of 2016, following the expiry of lock-up periods related to the listings of portfolio companies Parques Reunidos and Technogym, down from 243 pence year-on-year.

In the first weeks of January, Arle divested a 26% stake in Parques Reunidos for €9.9m, retaining a €30.4m stake, and sold its remaining stake in Technogym for €9.5m. The GP also recently sold its stake in Swedish mattress manufacturer Hilding Anders to KKR.

Arle originally invested in Expro in June 2008 alongside Goldman Sachs Capital Partners and AlpInvest Partners in a buyout deal valuing the business at £1.8bn. Since then, it has taken part in a number of funding rounds for the business, most recently being involved in a $333m round in June 2015. The investment was used to provide an additional $50m of liquidity and repay the company's $283m mezzanine loan facility.

The acquisition by Newgate is subject to regulatory approval and is expected to complete in 2017. Morrison & Foerster provided Newgate with legal advice.