2010 UK Private Equity Transaction Report

Marble Hill Partners Interim Management & Executive Search January 2011 www.marblehillpartners.com 0208 948 1771

Contents

Pg

Introduction 3

2010 Transactions (in alphabetical order) 4 – 9

Analysis 10

Transactions by type 10

Transactions by sector 11

Consumer Sector transactions 11

Transactions by month 12

Transactions by size 13

2010 Exits 14

Conclusion 15

Introduction

Welcome to Marble Hill Partners research and analysis of activity in the UK Private Equity market in 2010. As a specialist interim management and executive search consultancy for Private Equity backed businesses it is in our own interest to monitor where and with whom MBO/MBI’s, SBO’s, Trade and IPO exits are completed.

The data we have collated from Trade Press and Investor Press Releases is extensive and whilst we cannot guarantee that our research is 100% accurate (not all deals are publicised and in many cases values are undisclosed) we are keen to share our research and observations with our industry. We have only made note of deals with transaction sizes of £5 million and above.

We logged 157 transactions with a total value of £17.6 billion, with a mean deal size of £127 million, however deals such as Tomkins £2.9 billion skew this figure. Perhaps a more accurate indicator is the median of £45 million.

In this summary you will find an alphabetical index of all the deals recorded and a number of charts and graphs which reflect some of our observations. If you completed or know of transactions which haven’t been included then please do let us know and we will update the report for future reference.

2010 Transactions (in alphabetical order)

(Figures in red are trade press estimates)

Company Deal Type Exiting Investor New Investor Date Deal Size Sector Acorn SBO Phoenix Ontario Teachers Fund 10.02.10 £150,000,000 Healthcare Active Assistance SBO Isis August Equity / Fist Call 26.03.10 £23,000,000 Healthcare Acturis Summit Partners 13.08.10 Undisclosed TMT Aim Aviation MBO LDC 24.06.10 £20,000,000 Manufacturing Allied Glass SBO Close Brothers Private Equity 18.08.10 £75,000,000 Manufacturing Amber Taverns SBO Multiple VCT's LGV 13.10.10 £35,000,000 Leisure Amdega SBO 3i Endless 18.08.10 Undisclosed Construction Amtech SBO HSBC Primary Capital 12.03.10 £35,000,000 Engineering Transport and Andrew Page MBO Phoenix 23.03.10 £100,000,000 Distribution Antler MBO from pre-pack Barclays PE LDC 20.05.10 £15,000,000 Retail Archimedes Pharma Growth Capital Warburg Pincus and Novo 01.03.10 £65,000,000 Pharma Asperity MBO Inflexion 02.12.10 £25,500,000 Business Services Atmosphere Bars and Clubs MBO from Pre Pack Sun Capital 07.04.10 Undisclosed Leisure Attraction World MBO Maven Capital 10.12.10 £6,900,000 Leisure Autobar SBO Charterhouse CVC 09.08.10 £990,000,000 Consumer Services Accel Partners and Accel Partners and Autoquake.com Growth Capital Highland CP Highland CP 10.03.10 £6,000,000 Retail Bart Spices MBO Langholm Capital 04.05.10 £10,000,000 FMCG BAS MBO Bridgepoint 02.12.10 Undisclosed Business Services Brandon MBO Rutland Partners 24.08.10 £43,000,000 Equipment Rental Brit MBO - Take Private CVC and Apollo 26.10.10 £888,000,000 Britax Childcare SBO Carlyle Group Nordic Capital 22.11.10 £450,000,000 Manufacturing

Brunner Mond / Tata British Salt Exit – Trade Sale LDC Chemicals 20.12.10 £93,000,000 Manufacturing Cable Management Group Exit – Trade Sale LDC Thomas & Betts 04.10.10 £70,000,000 Manufacturing Calyx MBO Better Capital 10.09.10 £17,000,000 Business Services Camelot MBO Ontario Teachers Fund 26.03.10 £389,000,000 Leisure Card Factory MBO Charterhouse 08.04.10 £350,000,000 Retail Care UK MBO - Take Private Ftse Bridgepoint 03.03.10 £281,000,000 Healthcare Cath Kidston MBO TA Associates 26.03.10 £100,000,000 Retail Chemigraphic MBO RJD 17.12.10 Undisclosed Manufacturing CitySprint Growth Capital Dunedin 06.12.10 Undisclosed Business Services Clifford Thames SBO 3i Octopus Ventures 24.02.10 £6,250,000 Business Services Advanced Computer COA Exit - Trade Sale Alchemy Software 12.02.10 £100,000,000 TMT Compact Media Group MBO Lyceum 21.10.10 £17,000,000 TMT Compre Holidings MBO Milestone Capital 27.08.10 Undisclosed Financial Services CPA Global MBO Intermediate Capital MBO 26.01.10 £440,000,000 Business Services Credit Solutions Exit - Trade Sale Isis Arvato 22.11.10 £10,000,000 Financial Services Davy Markam Exit - Trade Sale Endless IVRCL 01.03.10 £10,000,000 Engineering Deb Group SBO Barclays PE Charterhouse 03.03.10 £325,000,000 Manufacturing Dental Buying Group MBO Synova 29.03.10 Undisclosed Healthcare DFS MBO Advent International 22.04.10 £500,000,000 Retail DRC MBO Hamilton Bradshaw 04.02.10 £30,000,000 Business Services Dunham Leisure MBI RJD Partners 28.09.10 £11,000,000 Leisure Dwell Growth Capital Key capital Partners 31.08.10 £5,000,000 Retail DWS Bodyworks MBO Risk Capital 17.06.10 Undisclosed Consumer Services Dynamic Change Exit - Trade Sale Midven Allocate Software 14.05.10 £9,000,000 Technology Easynet MBO LDC 21.07.10 £100,000,000 TMT Eden MBO Sovereign 28.09.10 Undisclosed Healthcare Elgin Infrastructure MBO 3i 29.01.10 £40,000,000 Infrastructure

Encore Tickets MBO Isis 14.04.10 £20,000,000 Leisure Engine Growth Capital HIG 15.10.10 £62,500,000 Business Services Enigma Exit - Trade Sale Isis HotelPlan UK 13.05.10 £24,000,000 Leisure Entec Exit - Trade Sale Growth Capital AMEC 30.03.10 £61,000,000 TMT Engineering Envy MBO SKG Capital 18.03.10 Undisclosed Retail SBO Electra and Penta 12.02.10 £270,000,000 Financial Services Euro Environmental Group MBO Sovereign Capital 01.03.10 £20,000,000 Utilities Euroffice MBO Darwin Private Equity 02.11.10 Undisclosed Retail Excelsyn Exit - Trade Sale Endless Albany Molecular Research 25.02.10 £12,000,000 Pharma Fenn Wright Manson MBO Darwin PE 04.10.10 Undisclosed Retail First Assist Exit - Trade Sale Barclays Private Equity Grood 30.09.10 £12,500,000 Financial Services Fish Insurance MBO Inflexion 11.06.10 £30,000,000 Financial Services Flexlife Growth Capital Maven Capital 28.10.10 £5,500,000 Oil and Gas Gardner Group SBO Carlyle Better Capital 03.02.10 £20,000,000 Manufacturing Getting Personal MBO Isis 24.06.10 £6,000,000 Retail Guralp Systems MBI Primary Capital 14.04.10 £20,000,000 Manufacturing Hewdon MBO Finnings Sun European Partners 05.05.10 £110,000,000 Equipment Rental Hobby Craft MBO Bridgepoint 30.04.10 Undisclosed Retail Wyndham Exchange & Hoseasons Exit - Trade Sale HG Capital Rentals 22.02.10 £52,000,000 Leisure Iglu.com MBO Matrix 15.01.10 £5,000,000 Leisure Imagine publishing Exit - Buy back August Equity Imagine Publishing 07.10.10 £14,000,000 TMT IMS Consulting MBO Sovereign Capital 06.12.10 Undisclosed Business Services Inspicio Exit - Trade Sale 3i Bureau Veritas 22.06.10 £450,000,000 Technology IPS Specials and World Medicines MBO Elysian Capital 06.05.10 Undisclosed Pharma JHP Group MBO LDC 11.01.10 £30,000,000 Education JLA MBO - Take Private Hg Capital 29.03.10 Undisclosed Business Services Growth Capital JC Flowers 04.08.10 £50,000,000 Financial Services

Kerridge Commercial Systems MBO - Take Private NVM 31.03.10 £9,000,000 Business Services Kettle Foods Exit - Trade Sale Lion capital Diamond Foods 26.02.10 £404,000,000 FMCG Kylmar Exit - Trade Sale LDC General Dynamics 28.06.10 Undisclosed Manufacturing Lanes Assistance MBO Gresham PE 08.04.10 £12,300,000 Business Services Leaders Limited MBO Bowmark 17.03.10 £48,000,000 Property LGC SBO LGV Bridgepoint 09.02.10 £257,000,000 Business Services LitComp MBO Maven 12.02.10 £5,500,000 Financial Services Square MBI Graphite Capital 04.06.10 £100,000,000 Property Lumison MBO Bridgepoint DC 01.11.10 Undisclosed Business Services LVG MBO from Pre Pack Kelso Place 22.02.10 £50,000,000 Consumer Services Marlin MBO Duke Street 07.04.10 £50,000,000 Financial Services Martindale Pharma MBO AAC 30.05.10 £100,000,000 Pharma Matrix MBO LDC 19.03.10 £10,000,000 Utilities Maximuscle Exit - Trade Sale Darwin PE GSK 14.12.10 £162,000,000 Manufacturing McKinnon and Clarke MBO Lyceum 05.01.10 £22,000,000 Business Services Minivator Exit - Trade Sale Gresham Handicare 02.02.10 Undisclosed Manufacturing Mountain Warehouse SBO KCAJ LDC 03.09.10 £20,000,000 Retail My-Wardrobe Growth Capital Balderton Capital 06.07.10 £6,000,000 Retail Nationwide Autocentres Exit - Trade Sale Phoenix Halfords 19.02.10 £73,200,000 Consumer Services Nigel Wright Group MBO Baird Capital 31.10.10 £15,000,000 Business Services NSL SBO 3i AAC 21.09.10 £120,000,000 Business Services Oasis Growth Capital Duke Street 15.04.10 £30,000,000 Healthcare Occam Exit - Trade Sale Isis St Ives Plc 02.06.10 £12,000,000 Business Services Office SBO West Coast Capital Silverfleet 16.12.10 £170,000,000 Retail Omega Red Exit - Trade Sale LDC South Staffordshire Plc 08.10.10 £35,000,000 Manufacturing Omnibus Exit - Trade Sale Palamon Miranda Technologies 09.09.10 £40,000,000 TMT OpSec Security Group MBO - Take Private Aim listed Investcorp 18.02.10 £7,600,000 TMT Paperchase MBO Primary Capital 13.07.10 £30,000,000 Retail

Payzone MBO - Take Private Aim listed Duke Street 05.01.10 £90,000,000 Financial Services SBO Bridgepoint KKR 27.01.10 £955,000,000 Retail Maxim Integrated Phyworks Exit - Trade Sale Advent Products 10.09.10 £45,000,000 TMT Plum Baby MBO Darwin Private Equity 31.05.10 £10,000,000 FMCG Poundland SBO Advent International Warburg Pincus 04.05.10 £200,000,000 Retail Promethean Exit - Float Apax Ftse 17.03.10 £93,375,000 TMT Pulse Staffing SBO HG Capital Blackstone 15.11.10 £75,000,000 Business Services RDL MBO Matrix Private Equity 08.11.10 £5,000,000 Business Services Readers Digest MBO from Pre Pack Better Capital 12.04.10 £13,000,000 Media Energy Ventures/Simmons RedSpider Growth Capital Parallel Energy 07.04.10 £7,500,000 Utilities Refresco Growth Capital 3i 25.03.10 £80,000,000 FMCG Rehab Works MBO Sovereign Capital 24.03.10 £10,000,000 Healthcare Republic SBO Change Capital TPG 21.06.10 £300,000,000 Retail Safe Estates MBO TDR Capital 01.04.10 Undisclosed Business Services Exit - Float Bridgepoint 18.03.10 £43,000,000 Property Scout moor Joint Venture JV Hg Capital 01.02.10 Undisclosed Renewables Snow and Rock MBO LGV 14.09.10 Undisclosed Retail Sophos SBO TA Associates Apax 04.05.10 £330,000,000 Technology Speed Check Services Growth Capital LDC 01.03.10 £9,000,000 TMT Spice MBO - Take Private Cinven 27.09.10 £251,100,000 Utilities Spiritel Exit - Trade Sale Penta Daisy Group 11.11.10 £37,000,000 TMT Spotless SBO Axa BC Partners 17.01.10 £522,260,000 Business Services St Tropez Exit - Trade Sale LDC PZ Cussons 28.09.10 £62,500,000 FMCG Stepstone MBO Hg Capital 30.03.10 £99,000,000 Business Services Stonegate Pub Company MBO TDR Capital 20.08.10 £373,000,000 Leisure Street Car Exit - Trade Sale Smedvig Zipcar 22.04.10 £20,000,000 Consumer

Sunseeker SBO HBOS Fl Partners 03.06.10 £25,000,000 Manufacturing Survitec SBO Montagu Warburg Pincus 29.01.10 £280,000,000 Manufacturing Synseal MBO HIG Europe 24.02.10 £110,000,000 Consumer Teaching Peronnel SBO RJD Partners Graphite Capital 27.07.10 £45,000,000 Business Services Team Telecom Group MBO Gresham PE 26.04.10 £32,800,000 TMT Telecity Exit - Float 3i Ftse 10.01.10 £130,000,000 TMT TGI Fridays Exit - Trade Sale AAC Carlson 29.07.10 £60,000,000 Consumer The office group SBO Bridges Ventures Private Investors 06.09.10 £43,000,000 Business Services The Webb Group MBO Findell Plc Endless 08.06.10 £15,000,000 Consumer Manufacturing and Thermal Engineering MBO Privet Capital 30.07.10 Undisclosed Engineering Time Out Growth Oakley Capital 25.11.10 £10,000,000 TMT Onex and Canadian Manufacturing and Tomkins MBO - Take Private Ftse Pension Plan 27.07.10 £2,890,000,000 Engineering Total Fitness SBO - debt for equity RJD Dunedin Barclays Ventures 12.10.10 Undisclosed Leisure Trafficmaster MBO – Take Private Vector Capital 02.06.10 £73,000,000 Technology Travel Jigsaw Exit - Trade Sale Isis Priceline 19.05.10 £24,000,000 Leisure Trutex SBO – From PrePack 3i Endless 26.02.10 £17,000,000 Retail UK drainage Network MBO Lyceum 11.01.10 Undisclosed Waste Management United House Growth Capital LDC 21.04.10 £50,000,000 Construction U-Pol SBO AAC Graphite 07.09.10 £130,000,000 Manufacturing Vision Security Group Exit - Trade Sale LDC Compass 27.08.10 £64,000,000 Business Services Vue Cinemas SBO Coller Capital Doughty Hanson 07.11.10 £450,000,000 Leisure Weird Fish MBO Piper 07.04.10 £9,000,000 Retail Weldex SBO NVM Dunedin 24.06.10 £100,000,000 Equipment Rental WillowBrook Growth Capital Graphite 06.04.10 £24,000,000 Healthcare Wilton Group Growth Capital Barclays Private Equity 02.06.10 £16,000,000 Business Services Xafinity SBO Duke St Advent International 27.01.10 £190,000,000 Business Services XLN Telecom SBO Zues ECI 27.09.10 £51,600,000 TMT Zenith Provecta SBO Barclays PE Morgan Stanley PE 13.08.10 £85,000,000 Equipment Rental

Analysis

2010 Transactions by type 1) Transaction activity significantly increased in 2010, up by more than 50% in Exit - IPO, 3 comparison to Marble Hill Partners’ (MHP’s) figures on 2009. Exit - Trade Sale , 27 2) Of the 64 exits recorded over half MBO, 72 were SBO’s.

SBO , 34 3) Despite much media speculation and a number of attempted but ultimately aborted flotations, the anticipated increase in IPO exits never materialised. Growth , 18

MBI, 3

2010 Transactions by Sector

50 45 8 40 35

30 2 25 20 15 10 6 1 2 10 2 1 5 Exit 39 26 11 12 11 8 5 5 4 3 1 0 New

Consumer Sector Breakdown, New

Consumer Services, 5 FMCG, 3

It is evident from the above graph that the Consumer and Business Services’ Retail, 21 sectors remain the most attractive for PE investors. Leisure, 10

Despite the VAT increase and austerity cuts, the retail sector remains hugely attractive to Private Equity with 21 new investments, totaling £2.8bn (4 undisclosed).

2010 Transactions by Month 30

25

4 20

1 15 6 3 1 4 Exits 1 10 20 3 3 New Investment 16 2 2 12 1 5 11 11 10 10 8 8 6 7 7

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

The first half of 2010 saw a surge in activity due to increasing levels of confidence, a rebound from the downturn in 2009 and the gradual easing of the debt markets.

In the second half of the year we can see activity leveling off and becoming more consistent. Is this the new norm or will 2011 be the long awaited for Private Equity?

The overall value of exits more than tripled in 2010. In particular, secondary buy-outs and trade sales led the way.

2010 Transactions by Size 80

70 15

60

50

40 Exit (IPO or Trade) New Investment 30 2 10 20 2

10 2 58 17 8 15 4 1 23 0 £5 - 50m £51 - 100m £101 - £200m £201 - £500 £501 - £1bn £1bn + Undisclosed

With leverage still notoriously difficult to obtain and harder still to syndicate, the lower mid market was the most active in terms of the number of transactions.

Our data shows 28 deals with a value of over £100 million. Wider media speculation suggests the number is closer to 40. An encouraging statistic but debt for transactions of this size has continued to be difficult to obtain. According to our sources we understand that the equity proportion in these larger transactions has been much higher (in some case 100%) than in the bumper years of 2006/2007.

With only one deal with a value of more than £1billion we have yet to see the mega-buy-out return. Continuing debt restrictions and fewer investment opportunities will make this a challenging part of the market in 2011.

2010 Exits 16

14

12

10

8 Trade or IPO 6 SBO

4

2 14 10 10 5 2 6 2 8 0 3 2 2 0 £5 - 50m £50 - 100m £100 - 200m £200 - 500m £500m + Undisclosed

As has been well publicised, secondary buy-outs continue to stand out as a source of new investment opportunities and in 2010 the most likely route to exit. The scarcity of deals coupled with the requirement to put money to work resulted in SBO levels comparable to those last seen in 2006.

This graph clearly demonstrates that in 2010 the vast majority of exit transactions with values north of £100 million were via an SBO, whilst trade clearly preferred the sub £100 million transaction size.

Conclusion

Despite the difficulties in the debt markets, high valuations and a highly stocked and competitive market, UK Private Equity did wake from its slumber in 2010, deploying more than double the amount of investment than in 2009.

In 2011 the pressure will be on from institutional investors to ratchet up investment activity whilst looking to dispose of older portfolio companies. Valuations for good businesses are set to continue to rise and investors will look to reduce their dependence on debt by providing higher proportions of equity.

At the larger end of the market the lack of potential deals has made it more expensive to make new investments and as a result the mega- funds may now start to focus on smaller than usual transactions.