UK sponsors CVC, BC Partners to bid for French catering firm Elior

UK private equity firms CVC Capital Partners Ltd and BC Partners intend to make a joint bid for Elior SCA, valuing the French catering firm at EUR3.5bn (USD4.7bn), including debt, the Financial Times reported citing insiders.

Charterhouse Capital Partners LLP, which currently owns 62.3% of Elior, originally planned to sell only the French firm’s EUR2bn catering unit, but according to knowledgeable sources, it would choose to divest the entire business.

Elior was bought via a EUR2.5bn take-private transaction in 2006. Its co-founder Robert Zolade holds 24.7% of the company, Chequers Capital owns an interest of 7.8%, while several other investors hold the rest of the shares. Elior posted revenues of EUR4.2bn and EBITDA of EUR362m in the fiscal year to 30 September 2012.

Together with its advisors, the vendor is working with banks on a debt package of over EUR2bn (USD2.6bn) to back the purchase of the entire company, the sources said, adding that Charterhouse sought to draw interest from other bidders before launching a formal auction.

BC Partners-led consortium acquires Suddenlink in $6.6bn deal

Suddenlink Communications, the name under which Cequel Communications Holdings LLC conducts its business, is to be acquired in a USD6.6bn (EUR5.4bn) deal by an investor group comprising UK-based private equity outfit BC Partners Ltd, Canadian pension funds manager CPP Investment Board (CPPIB) and the management of the US cable operator.

The total value of the transaction includes close to USD2bn of equity, incremental debts totalling USD500m and the assumption of slightly more than USD4bn of existing net debts.

The group of sellers is led by Goldman Sachs Capital Partners, the private equity arm of the US investment banking giant, and also features buy-out investors Quadrangle Group LLC and Oaktree Capital Management LP. The deal is seen as closing during the fourth quarter and is subject to standard conditions, among them clearance from regulators.

Suddenlink has created a new subsidiary that has received commitment from Credit Suisse Group AG (NYSE:CS) for the provision of senior unsecured bridge loans totalling USD500m. The plan is to use these funds or an equivalent amount secured through the issuance of high-yield bonds to cover partially the purchase price.

LionTree Advisors LLC, Goldman Sachs Group Inc (NYSE:GS), Paul Hastings LLP and Seyfarth Shaw LLP served as advisers to Suddenlink in connection with the transaction. BC Partners and CPPIB relied on counsel from Credit Suisse, Latham & Watkins LLP and Wachtell, Lipton, Rosen & Katz LLP.

Suddenlink ranks seventh among US cable operators, serving more than 1.4m residential and commercial subscribers across Texas, West Virginia, North Carolina, Oklahoma, Arkansas and Louisiana. For the year to 31 March 2012, the group booked revenues of USD1.96bn and had adjusted EBITDA of USD743m.

Chairman and chief executive Jerry Kent said that the deal would provide the company with fresh funds to maintain investment in infrastructure, technology and talent, allowing it to continue delivering superior customer service and industry-leading results.

Private equity firms in talks to acquire RBS’ Direct Line

Royal Bank of Scotland Group Plc (LON:RBS) may not get to list its unit Direct Line Insurance Plc as two consortia made up of leading private equity groups prepare to make a move on the business, the Sunday Times reported citing City sources.

RBS has been instructed by European Union regulators to sell Direct Line as compensation for its state-sponsored rescue in 2008. The UK lender is planning to float 30% of the business in September and has lined up 11 investment banks to assist with the process, with Goldman Sachs Group Inc (NYSE:GS), Morgan Stanley (NYSE:MS) and UBS AG (NYSE:UBS) assigned leading roles in the undertaking.

RBS is expected to file the required documents with the London Stock Exchange next month, the newspaper added.

However, the two private equity consortia are preparing to make their move at the end of July, potentially thwarting RBS’ plans. One of the groups comprises US private equity giants Blackstone Group LP (NYSE:BX) and Bain Capital LLC, while the rival bidding combo is made up of KKR & Co LP (NYSE:KKR) and UK-based Apax Partners Holdings Ltd and BC Partners Limited, the Sunday Times was told.

Direct Line, the company behind brands such as Churchill and Green Flag, is the number one UK car insurer in terms of policy numbers and the top home insurance provider, the article went on to add.

It has long been coveted by rival sector players and private equity groups although RBS’ attempt to offload the business in 2008 proved unsuccessful as bidders failed to match the asking price of GBP7bn (USD10.9bn/EUR8.9bn).

BC Partners also featured among the bidders then, joining forces with Apollo Global Management LLC (NYSE:APO). The auction also attracted US billionaire investor Warren Buffett and a consortium made up of CVC Capital Partners Limited and insurance group Swiss Re (PINK:SSREY).

Direct Line’s valuation has shrunk significantly since then although the company reversed its heavy 2010 losses to exit last year with profits of GBP454m, the Sunday Times said.