Bain Capital to buy Brakes for $2.8 billion
30 Jun 2007
Bain Capital will buy UK-based Brake Bros UK''s largest supplier of food to the catering industry, with a 14-per cent market share and among the top three in France, from New York-based private equity firm Clayton, Dubilier & Rice (CDR) for an undisclosed sum, which sources familiar with the transaction put at around £1.4 billion.
For CDR, the sell-off marks a successful and profitable exit, after having bought the company for £434 million five years ago with the founding family''s backing. It took out a debt repayment of about £275 million last year.
CD&R invested around £175 million of equity in the original deal. CD&R bought Brakes in 2002 for about £430 million. It said in a statement that since its acquisition, Brakes'' revenue had grown by 14 per cent and operating profit by nearly 70 per cent.
Bain
fended competition from a consortium of Blackstone and Aurigo, the bid vehicle
of former ASDA chief executive Archie Norman, and UK private equity groups CVC
and Cinven. Also reportedly interested in the acquisition were Texan food distribution
group Sysco and Iceland''s Baugur were also reported to be interested.
In a statement, Frank McKay, chief executive, Brakes, said the company doesn''t expect any significant changes to its strategy and that growth in 2007 has been "encouraging".
Investment banks JPMorgan Chase & Co advised CD&R on the deal.