ST. PETER PORT, Guernsey, Dec. 1, 2014 /PRNewswire/ -- European Capital Limited ("European Capital") announced today that it has completed the sale of its portfolio company Farrow & Ball to Ares Management for £275 million (€347 million or $433 million). European Capital received £236 million in equity proceeds (having previously received full repayment on the senior and mezzanine debt) and realised a gain of £138 million from the transaction, subject to closing adjustments. European Capital's compounded annual rate of return earned on its debt and equity securities over the life of its investment was 22%, including interest, dividends, realised gains and fees. European Capital received 5.4 times its equity investment and realised a compounded annual rate of return of 23% over the life of its equity investment, including dividends, realised gains and fees.
European Capital acquired Farrow & Ball in August 2006 in a One Stop Buyout®, underwriting the entire purchase price requirement by investing £86 million in senior term loans, senior subordinated debt, institutional loan notes and common equity. For more information about European Capital's investment in Farrow & Ball, click here: http://www.europeancapital.com/en/our-portfolio/farrow-ball.
"We are pleased to announce the sale of Farrow & Ball to Ares," said Giles Cheek, Managing Director and Head of Buyouts at European Capital Financial Services ("ECFS"). "This is a high quality business that has flourished both domestically and internationally during our period of ownership and delivered consistently strong growth despite a challenging economic backdrop for much of that time. The excellent return on investment is a testament to the strength of the Farrow & Ball brand, its management and European Capital's strategy of supporting its companies to realise their international potential. The company is well placed to build on its gains and we wish the team and its new financial partner continued success."
"Our partnership with Farrow & Ball over the past eight years has yielded a very positive outcome for European Capital with both turnover and EBITDA tripling since our acquisition," commented Benjamin Suquet, Director of ECFS. "We've worked closely with management to professionalise the business along with supporting the investment in people and infrastructure which contributed to Farrow & Ball's position as the brand leader in the premium paint sector."
Don Henshall, CEO of Farrow & Ball said, "European Capital have been a very collaborative owner of Farrow & Ball, encouraging management to formulate and execute a strategic plan which with their support has allowed us to successfully develop Farrow & Ball around the world."
Founded in 1946, Farrow & Ball is the definitive brand leader in the premium paint market. Leading the development of the premium paint market globally, Farrow & Ball has an international footprint incorporating the UK, USA, France and Germany complemented by sales via third parties across 50 countries. All paint and wallpaper continues to be manufactured, to the highest standards, by craftsmen in Farrow & Ball's home of Dorset, supporting the company's strong emotional consumer connection and loyalty.
European Capital was advised by Rothschild and DLA Piper.
ABOUT EUROPEAN CAPITAL
European Capital is an investment company for pan-European private equity, mezzanine and senior debt investments and is a wholly-owned affiliate of American Capital, Ltd ("American Capital") with $21 billion of assets under management. It is managed by European Capital Asset Management Limited ("ECAM" or the "Investment Manager"), a wholly-owned affiliate of American Capital. The Investment Manager has offices in London and Paris. As of 30 September 2014 the Investment Manager had 23 investment professionals and employed 29 support staff. European Capital and its affiliate, American Capital, will consider private equity transactions euros or sterling of up to 400 million for One Stop Buyouts® and 10 million to 100 million for senior, mezzanine and unitranche debt investment opportunities. For further information, please refer to www.EuropeanCapital.com.
ABOUT AMERICAN CAPITAL
American Capital (Nasdaq: ACAS) is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate, energy & infrastructure and structured products. American Capital manages $21 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $80 billion of total assets under management (including levered assets). Through an affiliate, American Capital manages publicly traded American Capital Agency Corp. (Nasdaq: AGNC), American Capital Mortgage Investment Corp. (Nasdaq: MTGE) and American Capital Senior Floating, Ltd. (Nasdaq: ACSF) with approximately $11 billion of total net book value. From its eight offices in the U.S. and Europe, American Capital and its affiliate, European Capital, will consider investment opportunities from $10 million to $750 million. For further information, please refer to www.AmericanCapital.com.
Contact: European Capital Financial Services Limited +44-(0)-207-539-7000
Giles Cheek, Managing Director, Head of Buyouts
Ben Suquet, Director, Buyouts