Palamon Capital Partners, a European mid market private equity firm, has agreed the sale of its 54 per cent stake in Loyalty Partner to American Express.
The sale price of the Palamon shares amounted to EUR240m, representing an enterprise value of approximately EUR500m for Loyalty Partner.
The transaction is subject to approval by the German Federal Cartel Office.
Loyalty Partner operates Germany’s Payback loyalty card, the consumer’s third most carried card.
Since leading the buyout of Loyalty Partner from Lufthansa in November 2005, Palamon has worked with Loyalty Partner to deliver a growth programme through a number of initiatives that have more than doubled revenue and profitability.
Through these initiatives, the company extended its loyalty card operations into Poland and India, developed a financial services proposition through the offering of combined payment and loyalty cards to consumers and launched an online and mobile coupon offering in Germany.
Loyalty Partner also created a data analytics division which provides retailers across Europe and the US with greater customer behaviour insight.
Holger Kleingarn, partner at Palamon, says: “We are delighted with this sale, which has tripled our invested equity and generated a 25 per cent IRR. This result reflects the strength of the business arising from the successful implementation of growth initiatives identified at the time of our investment. The achievements are a tribute to the capabilities and commitment of Alexander Rittweger and his team.”
Alexander Rittweger, founder and chief executive of Loyalty Partner, adds: “We have been able to achieve a step-change in the Loyalty Partner business during our five year partnership with Palamon. We greatly valued Palamon’s contributions and their ability to work closely with us to develop our growth strategy and substantially expand our business.”
