28th Apr 2014 08:48
LONDON (Alliance News) - Candover Investments PLC Monday said it has sold the Innovia Group to private equity firm Arle Capital at an enterprise value of EUR498.0 million, with Electra Private Equity PLC also investing in the buyout.
In a statement, Candover said the sale price represents a return of 2.1 times on the original investment.
Innovia is the last actively managed asset in the Candover 2001 Fund and will generate an estimated EUR12.8 million in cash, together with carried interest of EUR7.6 million, representing a 15% uplift on the valuation of Candover's investment in Innovia at the end of 2013.
Innovia, which manufactures high quality, speciality films for its key markets of labels, tobacco overwrap, packaging and polymer banknote substrate, was originally acquired by Candover Partners in 2004.
In early 2014, Innovia Security, a division of Innovia, secured the Bank of England contract to supply substrate for the new polymer GBP5 and GBP10 notes, with the transition from paper notes starting in 2016.
In a separate statement, Arle Capital, which has managed the Candover 2001 Fund since 2009, said it raised fresh capital to fund the transaction from a syndicate of global investors. Separately, Electra Private Equity also said it was one of the investors, investing EUR40.0 million in the EUR498.0 million acquisition.
"Innovia's market-leading films business is attractive in its own right, while its security business is particularly well positioned to benefit from further growth in the market for polymer bank notes as central banks around the world continue to choose to benefit from the advantages of polymer over paper banknotes," Bill Priestley, partners at Electra Partners, said in a statement.
Richard Booth, investment director at Arle, said the transaction represents an attractive outcome for all parties.
"Under Arle?s management, Innovia has focused on product development and innovation in its core markets which has delivered strong profit growth against a difficult economic backdrop," Booth said in a statement.
The sale of Innovia represents the final realisation in the Candover 2001 Fund following Vodafone Group PLC?s acquisition of ONO, in which Arle had a minority stake.
Candover Investments shares were Monday quoted up 0.8% at 516.00 pence, while Electra Private Equity shares were quoted up 0.5% at 2,653.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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