OMERS Private Equity is set to strike its first ever majority takeover in Europe with the purchase of V.ships, the world's largest ship servicing group by sales.
The buyout arm of Canadian pension fund OMERS was on Wednesday close to signing an agreement with Exponent Private Equity to buy the U.K.-based service group in a $520-million deal including debt, several people close to the situation said.
The transaction would mark OMERS' first fully-fledged European buy-out since it set up shop in London in September 2009, at a time when the financial crisis had all but brought private equity deals to a standstill.
The group has been described by rival private equity managers to be longing for a deal given that its two years in Europe had so far failed to yield its own transaction.
The buy-out arm of one of Canada's largest pension funds has participated as junior partner in the purchase of Haymarket Financial, a corporate lender, where it co-invested in late 2009 with Towerbrook Capital Partners.
OMERS had entered exclusive negotiations with Exponent two weeks ago after talks over a sale to Charterhouse Capital Partners, a U.K.-based private equity group, had collapsed at the last minute.
Charterhouse had revised its offer after a disagreement with the management of V.ships' Norwegian business over the terms of a buy-out.
It remained unclear how OMERS had managed to solve this issue. Exponent and OMERS declined to comment.
People close to the situation said V.ships' top management would re-invest into the company alongside OMERS.
OMERS Private Equity, whose European office is run by Mark Redman, a former 3i executive, has been very active in the U.S. and Canada and runs over $5.5-billion in investments globally.
OMERS also owns an infrastructure investment arm, Borealis, and a real estate group called Oxford Properties, which both have already done deals in Europe.
U.K. private equity rivals Cinven and Permira had previously been involved in the V.ships auction but dropped out at an earlier stage.
The auction is being run by Lazard, while RBC Capital Markets advised OMERS.
Exponent, which targets U.K. mid-market companies with a value of up to £350-million, bought V.ships in 2007 in a $338-million deal.
It subsequently brought in a new management team and expanded the group through acquisitions in Norway, Dubai and Singapore.
In January, Exponent bought the meat-free businesses of Premier Foods, the maker of Hovis bread and Mr Kipling cakes, which includes Quorn, for £205-million. In May it acquired Pattonair, the supply chain division of Umeco.
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