Private Equity Firms Making Exits in the UK


March 6, 2017

Monday started with a string of exit announcement by private equity firms in the UK. Among the firms either looking for a sale or firms, which have already found a buyer are Electra Private Equity, Better Capital and TDR Capital. The companies the firms are dropping from their portfolios include gym chain, struggling retail business and caravan holiday business.


Two companies are ‘up for sale’


From the three announcements, two companies are currently for sale. Private equity firm Better Capital is looking to depart from the struggling retail chain, Jaeger. Jon Moulton, private equity veteran and owner of Better Capital, told City A.M. the firm has been approached by “considerable number” of interested buyers.


Bolton’s private equity firm bought the majority stake in the old-British retailer in 2012. At the time, the sale price stood at £19.5 million. Since then the company has had to close three stores and it is unclear, what the private equity firm will be able generate from the retail chain. Bolton had told in an interview earlier this year that heavy discounting on the high street is a problem for the retail sector and a major cause of the current struggle.


However, Bolton also denied the retailer might be headed for administration. “We don’t see it going into administration otherwise we wouldn’t be sitting here,” he told City A.M. Among the interested buyers is Harold Tillman, the former head of Jaeger.


The other company up for sales is the gym chain, David Lloyd. The Telegraph reported the majority owning private equity firm is looking to sell the chain for £1.3 billion. The gym group has gyms in the UK, the Netherlands, Belgium and Spain.


Private equity investor TDR Capital bought the chain in 2013. The sale price stood at £750 million, which is undoubtedly going to be exceeded if a sale is to go through. Among the interested buyers is the rival gym chain Virgin Active. This deal would have to be scrutinised by the CMA, which would slow down the process and possibly even prevent it. Other private equity firms are also eyeing on the company.


One confirmed exit


One of the announced deals featured Electra Private Equity’s sale of caravan parks. The firm sold the Parkdean Resorts to Onex Corporation for £1.35 billion. The Proactive Investors reported the firm to have made a £405 million in proceeds from the sale. The firm’s total profit from the investment is over £500 million, with a return of 3.9 times cost.


The private equity firm is in the process of exciting a number of investments, as it is reviewing its current investment and the business model. The firm announced in January that it is launching an all-encompassing review after turbulent times in the boardroom in the past few years. The new board members, the activist investors Edward Bramson and Ian Brindle have a reputation of shaking up the companies they invest in.

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