18th May 2011 11:31
For immediate release on 18 May 2011 Candover Investments plc - Interim Management Statement
Candover Investments plc ("Candover" or the "Company") today issues its Interim Management Statement in accordance with FSA Disclosure and Transparency Rule 4.3. This statement which, as usual, is unaudited, relates to the period from 1 January 2010 to the date of this announcement.
Completion of sale of Candover Partners Limited ("CPL" or "the manager") and a strip of assets ("the strip")
The completion of these two interlinked disposals occurred on 19 April 2011. CPL has been sold to a new private equity partnership formed by some of CPL's executives, Arle Capital Partners LLP ("Arle"). Arle will continue to manage Candover's investments. The portfolio strip sale comprised selling 29.1% of the Company's interests in each portfolio company to a new entity formed by Arle and Pantheon ("the purchaser").
The strip transaction was structured to deliver cash proceeds of £60.0 million, subject to the exercise of tag rights by third party investors. In the event, proceeds received by the Company were reduced by £0.4 million to £59.6 million as a consequence of the exercise of tag rights by certain investors. The strip disposal completion mechanism provided for the Company to sell, at cost, to the purchaser 29.1% of any follow-on investments made between 6 December 2010 and the date of completion. As further investments were made in this period totalling £17.2 million (detailed below), £5.0 million was therefore paid by the strip purchaser to the Company on completion, increasing total proceeds received to £64.6 million.
Portfolio valuation and performance
Candover's investment portfolio was last valued as of 31 December 2010, with a net asset value per share of 814p. Since that date, a number of follow-on investments have been made in investments held by the Company, and proceeds, both new and deferred, have been received from investments sold by the manager and the disposal of the Company's interest in two mezzanine funds. These transactions are summarised below.
The next valuation of the Company's assets will be conducted as of 30 June 2011. Consistent with its valuation policy the Company will continue to apply earnings based valuations to portfolio businesses and will appropriately value the carried interest of the Company in the Candover Funds.
Whilst challenges remain, overall the portfolio has performed in line with the manager's expectations during the first quarter of the year.
Follow on investments
Since 31 December 2010, Candover has invested a total of £17.2 million in two follow on transactions, comprising £0.6 million in EurotaxGlass's to finance a small acquisition and £16.6 million in Parques Reunidos as part of the refinancing of existing equity bridge arrangements put in place at the time of the original acquisition of the business.
Realisations
The manager completed the sale of Equity Trust in January 2011 which generated initial cash proceeds of £14.1 million, including carried interest for the Company in respect of the Candover 2001 Fund. A deferred payment of £5.1 million is due by the end of June 2011, which will generate an additional £2.0 million of carried interest. In March 2011, early repayment of the deferred proceeds relating to Ontex occurred, with Candover receiving £10.6 million, including further carried interest of £3.0 million in respect of the Candover 2001 Fund.
In addition, in January 2011 the Company completed the sale of its interests in two mezzanine funds with initial proceeds of £1.3 million received and a further £1.3 million due by 30 June 2011.
Outstanding commitments
As at 31 December 2010, the Company had outstanding commitments of £38.9 million which have now been reduced by £23.6 million to £15.3 million as a result of both the strip transaction and the follow on transactions noted above.
For further information, please contact: Candover Investments plc +44 207 489 9848 Malcolm Fallen, CEO Tulchan Communications LLP +44 207 353 4200 Susanna Voyle
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