Cinven acquires Prezioso, Pronet Güvenlik from Turkven


June 25, 2012

British buyout firm Cinven Ltd. announced agreements Monday, June 25, to acquire  French energy sector service provider Prezioso-Technilor SAS and Turkish  security alarm company Pronet Güvenlik ve Danismanlik Hizmetleri AS from their  existing investors.

The prices in each case were undisclosed, but sources  close to the situation said both companies were acquired for enterprise values  in the range of €300 million to €350 million ($374 million to $437 million) .

Prezioso is being sold by mezzanine and private equity investor Indigo  Capital LLP, while Pronet’s sellers are institutional investors including  Turkish private equity fund Turk Venture Partners Ltd., or Turkven, and Dutch  development bank Netherlands Development Finance Co., or FMO.

Cinven’s  swoop comes as it reportedly eyes a listing of its U.K. pension-annuities and  home loans business, Partnership Group of Cos. — although an offering is one of  several possible options and would not happen before the second half of next  year. The Financial Times quoted an analyst’s tentative estimate of a possible  market capitalization of the business at that time at £1 billion ($1.55  billion).

The London private equity house is also focused on an initial  public offering for its Italian aerospace supplier Avio SpA, despite reports of  private equity approaches. Market uncertainties may, however, eventually force  it to reconsider. Bloomberg News recently reported that CVC Capital Partners and  Italian buyout firm Clessidra SGR SpA had submitted a firm offer valuing the  Milan-based manufacturer at more than €3 billion. French aerospace company  Safran SA had also previously shown interest in Avio.

Prezioso, of  Vienne, France, has a long history of attracting private equity investment.  Bought out by Barclays Private Equity (now Equistone Partners Europe Ltd.) for €59 million in 2000, it was subsequently acquired for €170 million in 2002 by  what was then PPM Ventures Ltd. (now Silverfleet Capital Partners LLP), with  mezzanine finance provided by Indigo. PPM appears to have overpaid and  eventually handed the investment over to Indigo. Indigo, in turn, came close to  selling the company to 21 Centrale Partners in 2009, but withdrew from the deal  at the depths of the post-Lehman crash.

Cinven’s investment comes in at  about 1 time Prezioso’s 2011 sales of €320 million. The French company, which  provides coating and insulation services for offshore oil and gas and for  nuclear installations, has been growing at about 15% a year. Prezioso has  identified significant growth opportunities in markets including Brazil, the  Middle East and Northern Europe and fits well with Cinven’s strategy of looking  for established European companies with growth opportunities in emerging  markets.

Debt financing has been provided by a group of seven banks that  are existing lenders to Prezioso and will roll over their commitments as part of  the transaction.

Meanwhile, Pronet, of Istanbul — Cinven’s first  acquisition in Turkey — has been growing at a rate of about 40% a year, as  Turkey’s growing middle class becomes increasingly aware of household and  business security. It expects to continue expansion in Turkey and the  surrounding region.

Pronet CEO Alex McNutt will continue with the company  under Cinven’s ownership.

Both transactions will be financed from  Cinven’s fifth fund, the €5 billion fund the firm is currently raising. Cinven  announced a €3 billion first closing in March and recently passed the €3.5  billion mark.

Cinven partner Guy Davison and associate Yalin Karadogan  received advice on the Pronet deal from Citigroup Inc., with legal counsel from  Freshfields Bruckhaus Deringer LLP and Pekin & Bayar. The sellers were  advised by Goldman Sachs Group Inc. and law firms YükselKarkinKüçük Attorney  Partnership and Van Campen Liem.

On Prezioso, Cinven was advised by  Ludovic Tron of Leonardo & Co. and Jérôme Brunet of Bain & Co. Thomas  Forschbach and Nathalie Alibert of Latham & Watkins LLP provided legal  advice.