UK private equity firm Candover Partners is to inject £15m (€17m) of fresh equity into the DX Group, as the independent UK and Ireland mail and courier company has agreed to a capital refinancing and management buy-in.
The arrangement will see current chairman David Mitchell and CEO John Coghlan replaced by David Hoare and Petar Cvetkovic, the former chairman and CEO of express delivery company Target Express. Coghlan is to resume his former role as non-executive director.
DX is the UK’s largest independent mail provider, and the only company to be unreliant on the Royal Mail for any aspect of its service. Candover acquired DX in 2006 for £349m (€395.5m), but the company was rocked by a tough environment for mail providers during the downturn.
Coghlan said, “DX Group has weathered an unprecedentedly tough trading period over the last 18 months, but has remained profitable and cash generative. Now, with the support of Candover and our banking group, we have a strengthened balance sheet and the freedom to push ahead.”
Candover has also suffered a difficult 18 months, and was forced in April 2009 to freeze its €3bn (€3.4bn) 2008 buy-out fund, citing “unprecedented global economic developments” after Candover’s listed arm defaulted on its own €1bn commitment to the fund. Candover went on to teminate the fund’s investment period in January. Investor commitments to the fund were scaled back to €100m to support the fund’s sole investment, oil and gas services company Expro. The firm’s investment in DX was made through its 2005 fund.
Since the freeze, Candover has seen a slight rebound in its asset values, with net asset per share increasing 15.1 per cent between June and December 2009, up to £10.38 (€11.41).
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