CVC Capital Agrees to Buy Domestic & General From AdventKiel Porter and Patricia Kuo
CVC Capital Partners Ltd., one of Europe’s largest private-equity firms, agreed to buy Domestic & General Group Ltd., a U.K. home-appliance warranty provider, from Advent International Corp.
Domestic & General’s management will retain a stake in the business, London-based CVC and Boston-based Advent said in e-mailed statements today, without disclosing a purchase price.
CVC is paying 750 million pounds ($1.2 billion) for Domestic & General, according to two people with knowledge of the transaction, who asked not to be identified because the information is private. Advent initially sought as much as 1 billion pounds for the Bedworth, England-based company, three people with knowledge of the matter said last month, and was considering paying itself a special dividend if talks with CVC and other potential buyers collapsed.
Advent paid 524 million pounds in 2007 for 101-year-old Domestic & General, which works with appliance makers and sellers to provide extended warranties and is expanding outside the U.K. Earnings before interest, taxes, depreciation, and amortization doubled to 83 million pounds in fiscal 2013 from 41 million pounds in fiscal 2008, and the company’s sales are 600 million pounds a year, Advent said.
“We are very pleased to be investing to acquire D&G alongside management,” Pev Hooper and Peter Rutland, a partner and senior managing director at CVC respectively, said in the firm’s statement. “We look forward to working with them and using CVC’s international resources to help take D&G to the next stage of its development.”
The buyout will be funded with 500 million pounds of high-yield bonds and 80 million pounds of loans, according to two people with knowledge of the financing, who asked not to be identified because it is private. The bonds will comprise 350 million pounds of senior secured notes as well as 150 million pounds of unsecured debt, said the people.
James Olley, a London-based spokesman for CVC who works for Brunswick Group, didn’t immediately reply to an e-mail seeking comment on the financing.
Goldman Sachs Group Inc., Barclays Plc, Credit Suisse Group AG, BNP Paribas SA, Morgan Stanley, Societe Generale SA, and UBS AG provided fully committed debt financing, according to a CVC statement.
Advent was advised by Goldman Sachs, Marlborough Partners, PricewaterhouseCoopers LLP and Freshfields Bruckhaus Deringer LLP. CVC was advised by UBS, KPMG LLP, OC&C Strategy Consultants and Clifford Chance LLP. Domestic & General’s management was advised by Macfarlanes LLP and Jamieson Corporate Finance.