LGV Agrees o515 Million Unipoly Acquisition

Legal & General Ventures (LGV) is backing the management team of BTR’s Polymer Products Group in a GBP515 million (ecu 764 million) MBO. A total GBP620 million funding package of has been raised for the deal, LGV’s largest lead to date by a substantial margin.

Unipoly SA, a Luxembourg-based holding company, is acquiring the BTR Dunlop Belting Group, the BTR Fluid-Handling Group, the Schlegel Sealing and Shielding Group and the BTR Composites Group; these four divisions comprise 32 business employing over 5,400 people in 15 countries, and made profits of GBP67 million on sales of GBP471 million last year.

Ian Taylor of LGV says the management and backers see substantial scope for improvement of Unipoly’s performance by developing the Dunlop and BTR businesses, which have not previously been integrated, as a cohesive unit.

There are also plans to develop the group through acquisition, and the buyout structure incorporated funding for one acquisition which is “already quite a way down the track”, according to Ian Taylor.

Unipoly chief executive Laurence Cant said “We will focus on co-ordination between the groups to aid geographical expansion whilst giving each management team the autonomy and support it needs to deliver increased market share and geographical penetration. We already operate in Europe, North America, Asia, Australia and the Pacific Rim, and we will consider further acquisitions as part of our business development strategy”.

The GBP620 million funding package comprised GBP175 million of equity, GBP50 million of mezzanine, GBP345 million of term loans and GBP50 million of working capital. LGV is investing GBP75 million out of its 1997 Equity Fund alongside GBP1 million from Group Trust. The balance of the equity will be supplied by its parent group, Legal & General Assurance. Similarly, GBP8 million of the mezzanine has been invested by the LGV-managed Mithras Investment Trust and o1 million by Group Trust, with Legal & General Assurance subscribing the balance. The institutional equity holding is 77%, with a further 5% attached to the mezzanine tranche. Management’s holding is unratcheted.

Fuji Bank arranged the senior debt and working capital funding. The term portion of the loan comprises a conventional seven-year A tranche and a GBP45 million B tranche with an eight-year bullet repayment.