Electra Trust Cashes In On Two Portfolio Cos. –

Electra Investment Trust (EIT) in mid-July exited two substantial investments through sales to other U.K. private equity houses.

The realizations, of PHS Holdings and The Stationery Office Holdings, form part of EIT’s continuing liquidation program. The trust plans to wind itself up within five years following its successful defense earlier this year against a hostile bid from 3i. The realization proceeds are being used to reduce the GBP750 million ($1.193 million) credit facility EIT had 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 & Co. EIT received gross proceeds of GBP122 million cash on the sale for a holding acquired at a cost of GBP20 million. The sale price also represents a substantial increase in 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% holding in the company. Since the buy-in, PHS has made ten acquisitions, which were funded through cash flow, doubled revenue to GBP60 million and tripled profits to more than GBP12 million.

Shortly after the PHS exit, Electra sold Stationery Office Holdings for GBP82 million in cash to Meadowpoint, a vehicle backed by the euro 1.8 billion ($1.93 billion) Apax Europe IV.

The transaction generated gross proceeds of GBP34 million for EIT.

Stationery Office Holdings is one of the four independent companies that was spun-off earlier this year from The Stationery Office, the public-sector printer and publisher that was taken private in late 1996 through an Electra-led buy-in/turnaround.

Electra paid GBP54 million for Stationery Office operating divisions and structured additional facilities of GBP71 million to fund restructuring and commercialization of the business, which was losing money at the time.

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

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