Electra Partners today announces that it has acquired a portfolio of second lien and mezzanine debt positions in five UK and European companies for £30 million. Bought from an international bank at a significant discount to face value, the majority of the positions are due to mature within the next three years.
The portfolio provides a healthy yield and Electra Partners expects that this, combined with purchase discount, will generate returns comparable to those achieved on equity investments.
The largest holding in the portfolio is in UK caravan parks operator Park Resorts. Electra Partners already has a substantial holding in Park Resorts having previously invested £45.5 million in term debt facilities from Lloyds Banking Group in February this year and having acquired a further stake from RBS in July. Electra Partners' total investment in Park Resorts now stands at £69.8 million.
Commenting on this acquisition, Alex Fortescue, Chief Investment Partner at Electra Partners, said:
"This transaction is a good illustration of banks looking to deleverage their balance sheets and simplify their businesses. It's a trend we have been anticipating for some time now believing that it will create fantastic opportunities for private equity firms who, like us, have the flexibility and firepower to acquire such stakes. Electra's last four investments have all been bank related assets."
The Electra Partners deal team includes Alex Fortescue, Chris Hanna and Sarah Williams.
This is the third major investment Electra Partners has made this year, following the previously mentioned acquisition of term debt facilities in Park Resorts in February, and the buyout of UK property management services business, Peverel Group, in March.
Electra Partners refers to Electra Partners LLP acting on behalf of its client Electra Private Equity PLC.
For further information please contact:
For Alex Fortescue:
Nick Woods, M:Communications +44 (0)20 7920 2348
Monique Dumas, Investor Relations Partner, Electra Partners +44 (0)20 7306 3911
Note to Editors:
About Electra Partners LLP
Electra Partners is an independent private equity fund manager with over 25 years experience in the mid-market buyout sector. As at 31 March 2012, the firm had funds under management of over £1.3 billion. The firm's flexible investment approach allows it to invest across a broad range of sectors and financial instruments including equity, senior equity, convertibles and mezzanine debt. Concentrating principally on Western Europe, and with the majority of investments expected to be made in the United Kingdom, Electra Partners typically seeks to invest in the region of £40 to £100 million of equity, in deals of up to £300 million enterprise value.
The firm's major client is Electra Private Equity PLC, a private equity investment trust which has been listed on the London Stock Exchange since 1976. The firm also manages the Electra Partners Club 2007 LP, a fund raised in 2008 for the sole purpose of investing alongside Electra in controlled investment situations.
For further information please visit www.electrapartners.com.
Electra Partners LLP is authorised and regulated by the Financial Services Authority.