Crash of Kravis-Inspired Candover Shows Woes of Buyout Industry

The leaders of a prestigious European private-equity firm and one of its companies were celebrating at a pair of parties on the French Riviera. It was Sept. 13, 2008. Gerry Grimstone, chairman of Candover Investments Plc, sipped cocktails and reviewed strategy with executives of the firm’s leveraged-buyout unit on a yacht in Monaco harbor. Two months before, Candover Partners Ltd. had won a bidding war to purchase oil services company Expro International Group Plc for 2 billion pounds ($3.19 billion), then the largest LBO in Europe that year.

That same evening, just a short cruise southwest along the coast, Ferretti SpA was showing off one of its luxury vessels at the Cannes Yacht Festival. As models wearing Bulgari jewelry promenaded on board Ferretti’s new Altura 840 yacht, the Italian boatmaker had reason to cheer. The Candover-controlled company had just received a new order from Dubai for 24 yachts, and it was planning an initial public offering by the end of 2008, Bloomberg Markets magazine reports in its January issue.