Global private equity firm Advent International is reportedly considering paying itself a dividend by recapitalising portfolio company Domestic & General’s debt rather than continue with an expected sale.
The buyout house was hoping to sell the domestic appliance warranty supplier for almost double the £524m it paid in 2007, £434m of which was debt according to Reuters.
CVC Capital was thought to be in pole position to pick up the asset after seeing off Blackstone, Clayton Dubilier & Rice and Stone Point Capital earlier this year.
But Advent has now charged banks with working on a refinancing package for the £434m of debt, plus extra debt to pay the dividend, Reuters said, citing banking sources.
One told the news agency, “Although Advent would like to sell Domestic & General there is a price tag and if it isn’t reached then they should comfortably be able to hold on to it, refinance the debt, take a payout and sit on it for a while.”
D&G’s sales have risen from £300m at the time of the buyout to £570m at the end of March this year, the report added.
In November Boston-based Advent finished raising a mammoth €8.5bn fund, the second-largest private equity vehicle closed since the financial crisis after Blackstone’s recent real estate offering.
GPE VII will focus primarily on developed US and European markets, according to the firm, which was originally targeting €7bn when it officially launched the fund just eight months ago.
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