Two Hicks Muse Deals Confirm Push into Europe

Leading US private equity group Hicks, Muse Tate & Furst, which this spring unveiled plans to open a London office, announced its first stand-alone acquisitions in the UK and Denmark.

Hicks Muse in August agreed to acquire Glass’s Group, a specialist provider of information services, from Duke Street Capital for GBP126 million (ecu 179 million). By early October, the private equity group had also reached definitive agreement with Booker plc to acquire L Daehnfeldt, a leading horticultural seeds group, in a deal valued at DKr 305 million (ecu 41 million).

The Daehnfeldt acquisition is due to complete in November.

Both transactions, though small by Hicks Muse’s US standards, appear to be in line with the firm’s trademark “buy and build” approach.

Glass’s publishes a variety of automotive valuation data and is the UK market leader in automotive valuation data, repair estimating and bodyshop management systems for the car servicing, repair and insurance markets. With a 90% share of its core market s in the UK, Glass’s will provide a pan-European platform for expansion and acquisition in the automotive information services sector.

Daehnfeldt is a horticultural seed companies with a strong germplasm base and extensive expertise in flower and vegetable breeding, seed production and marketing. It is a market leader in Northern Europe in both the flower and vegetable seed sectors, selling internally-bred strains and exclusively licensed products to professional growers. Daehnfeldt also has a dominant position in the Danish packet seed market and is now establishing itself as a leading player in this sector in Norway.

For the investment in Daehnfeldt, Hicks Muse joined forces with Emergent Genetics, Inc., a new management affiliate based in Boulder, Colorado, whose two partners have 20 years’ experience of the seed production business. Hicks Muse already has a number of management affiliates in various industry sectors that work exclusively with the private equity group to evaluate transactions in their sectors of specialisation. The establishment of the Emergent Genetics affiliation implies that Hicks Muse plans additional acquisitions in the horticultural industry.

The hybrid seed sector is ripe for global consolidation, because smaller stand-alone companies such as Daehnfeldt, unlike their larger rivals, cannot afford to tap developments in the biotechnology sector.

Both the Daehnfeldt and Glass’s deals are extremely conservatively structured, with debt/equity ratios of approximately 50:50. Chase Manhattan is providing senior debt for both acquisitions.