Candover, the European buyout specialist, has signed an agreement to acquire Capital Safety Group for an enterprise value of EUR 415m (USD 565m) from Electra Private Equity PLC.
Candover, the European buyout specialist, has signed an agreement to acquire Capital Safety Group for an enterprise value of EUR 415m (USD 565m) from Electra Private Equity PLC. This is the seventh investment to be made from the EUR 3.5bn Candover 2005 Fund.
CSG, headquartered in Milton Keynes in the UK, is the world’s leading specialist designer and manufacturer of height safety and fall protection equipment. The company owns two leading brands, DBI-SALA and Protecta, and produces products such as harnesses, lifelines and anchors used by those who work at height. Its products are sold globally and are widely used in industries such as oil and gas, construction, manufacturing and telecoms.
Equity funding is being provided by the Candover 2005 Fund. The management team will also be re-investing in the new equity structure. Debt and mezzanine financing is being led by HBOS. The acquisition is conditional upon approval by competition authorities.
CSG has grown significantly under the current management team. Growth has come from a combination of the expansion of the fall protection market driven by buoyant underlying growth in the user markets and successful company specific initiatives, including a focus on high-growth sectors such as oil and gas and innovative product development . This strategy will remain a focus for the group going forward, with particularly strong opportunities for growing market share in Europe and Asia.
Candover is backing a highy experienced management team led by Paul Trinder, who will become Executive Chairman (formerly CEO), and Pat Velasco, who will become Group Chief Executive (formerly President – North America).
Commenting on the acquisition Pat Velasco, Group Chief Executive of CSG said: ‘We are delighted to have the backing of Candover as we look to continue growing the business globally. Our strategy of delivering market leading, premium products will continue and we will be working with Candover to identify potential growth and acquisition opportunities to further strengthen our position as the world leader in the fall protection market."
Brian Mercer, a Candover director, said: ‘CSG is a global business with a market leading position in a growing safety-critical area. We are backing a great management team who has already delivered impressive, double-digit growth, and who have ambitious plans that we are confident will lead to significant results over the next few years. The company is particularly strongly positioned in the oil and gas sector, which is an area Candover understands well via its investment in a number of market leading oil services support businesses."
Candover led the buyout of Vetco International, a leading global supplier of drilling and production equipment for on and offshore oil and gas field from ABB in 2004. Vetco Gray, a division of Vetco International was sold to GE Oil & Gas for EUR 1.5bn in January 2007. More recently, Wellstream, a leading designer and manufacturer of high quality, custom made unbonded flexible pipeline systems used by the offshore oil and gas industry, was listed on the London Stock Exchange. Candover led the buyout of Wellstream from Halliburton in 2003.
Candover was advised on the transaction by UBS (M&A), Latham & Watkins (legal), PwC (financial due diligence),Deloitte (tax structuring), ERM (environmental due diligence) and Marsh (insurance due diligence).
Close Brothers advised Electra Private Equity on the sale of Capital Safety Group to Candover. Andrew Cunningham, Director, Close Brothers, headed up the team and comments: ‘Electra Partners has secured an excellent return on this long-term investment. Capital Safety is a high quality international business with strong management. It has a healthy future in what is a growing market for safety equipment and in Candover it has the right partner to take the Company to the next stage of development.’
Background Note: Candover means Candover Investments plc and / or one or more of its subsidiaries, including Candover Partners Limited as General Partner of the Candover 1997 and 2001 Funds and as Manager of the Candover 2005 Fund.
