Electra Investment Trust heads for the exits: The winding up of the Electra Investment Trust proceeds apace following Electra’s

Electra Investment Trust (EIT) has wrapped up two substantial disposals via sales to other UK private equity houses. The realisations, of PHS Holdings and The Stationery Office Holdings (TSOH), form part of EIT’s continuing liquidation programme. The trust plans to wind itself up within five years following its successful defence earlier this year against a hostile bid from 3i Group. Realisation proceeds are currently being used to reduce the GBP750 million credit facility EIT arranged to support a GBP1.2 billion share buy-back.

Charterhouse Development Capital paid GBP215 million for PHS Holdings, the largest company in the EIT portfolio, following an auction conducted by Goldman Sachs. EIT receives gross proceeds of GBP122 million cash on the sale of a holding acquired at a cost of GBP20 million. The sale price also represents a substantial uplift on the GBP85 million May valuation of EIT’s stake in PHS.

Electra acquired the workplace services company in 1995 through a GBP46 million buy-in that enabled the family trusts that owned PHS to retain a 20 per cent holding in the company. Since the buy-in, PHS has made ten acquisitions, which were funded through cash flow, doubled turnover to GBP60 million and trebled profits to more than GBP12 million.

Shortly after the PHS disposal, Electra sold TSOH for GBP82 million cash to Meadowpoint, a vehicle backed by the euro 1.8 billion Apax Europe IV fund. The transaction generated gross proceeds of GBP34 million to EIT.

TSOH is one of the four independent companies demerged earlier this year from The Stationery Office (TSO), the public-sector printer and publisher that was privatised in late 1996 through an Electra-led buy-in/turnaround.

Electra paid GBP54 million for the TSO operating divisions and structured additional facilities of GBP71 million to fund restructuring and commercialisation of the business, which was loss-making at the time.

Immediately prior to the demerger, EIT’s holding in TSO was valued at GBP70 million compared with an original cost of GBP27.1 million. Going forward, EIT retains 41.5 per cent stakes in each of the remaining TSO companies; the three holdings have an aggregate value of GBP24.9 million.

Earlier this year, EIT netted some GBP45 million from the sale of Wap, a German cleaning group.