British tycoon sells off stake in Phones4u to PE firm

British tycoon John Caudwell, who started Phones4u in 1987 with £1,350 and about two-dozen Motorola mobile phones, continues to reap a rich harvest. While he netted £1.46 billion in a 2006 stake sale in the firm, he will get another £150 million windfall by selling his remaining stake.

One of Britain's richest men, Caudwell, 57, is disposing of his remaining 25 per cent shareholding in Phones4u to private equity firm BC Partners, which is acquiring the company for around £700 million.

Phones4u, which operates a chain of 500-plus retail stores, saw sales jump by more than 20 per cent to over £900 million last year and earnings before interest, tax, depreciation and amortisation also by 20 per cent to £130 million. Its mobile phone insurance business accounts for half of its profits.

Caudwell sold 75 per cent of his stake in the company, which is Britain's largest mobile phone chain - selling one in four smartphones sold in the country - to US-based Providence Equity Partners and Doughty Hanson for £1.46 billion in 2006.

"With its market-leading position, strong and trusted brand, multi-format strategy, and extensive store network, Phones4u is ideally positioned to benefit from further strong growth in the smart phone market, as technological innovation and product evolution continues," remarked Andrew Newington, managing partner at BC Partners.

The European buy-out firm launched a £430 million seven-year bond to finance the acquisition. The PE firm has investments in Fitness First, a gym chain, and Foxtons, a real estate agency.

Smartphone retailing is booming in the UK, with a growing number of youngsters acquiring these handsets. In fact, the Office of National Statistics (ONS) recently included smartphones and apps in the 'shopping basket' of goods that figure in the Consumer Prices Index and the Retail Prices Index. This will help in the formulation of official inflation data.

The ONS compiles data on inflation by comparing the price of 650 products. "Many of these new items show the way technology is changing our lives," said Phil Gooding, the ONS statistician. "Powerful smartphones and the applications that run on them have become essential for many when communicating or