Europe based Cinven affiliated firm to takeover Spice, a provider of support services in UK

After turning down two bids for its takeover, Spice is to be finally acquired by Cinven. Cinven, the European buyout firm, said it will be acquiring Spice, a provider of support services for an estimated 251.1 million pounds. The move comes in the face of two other subsequent buyout bids Spice fought, but still has to attain shareholder approval and other mandatory regulatory certifications. Cinven made the acquisition through Cilantro Acquisitions, a firm it created.

Cilantro Acquisitions director Pascal Heberling said the Cinven purchase comes as a great addition to the firm, given its know-how and the considerable additional finances that Spice will add to Cinven. The funds will enable Cinven undertake organic growth, as well as acquisition growth and accelerate the development of its international offering, said Heberling. Spice is found in Leeds and is engaged in infrastructure support, offering outsourcing services to the utilities industry.

Spice is an AIM listed firm and was begun over a decade ago. The firm’s pretax profit posting was pegged at 31.5 billion dollars as of April 2010, and a turnover of 310.7 million pounds. On its part through, London-based Cinven is an international firm with offices in Paris, Frankfurt, Milan and Hong Kong. The company acquires European-based businesses that require an equity investment of €100 million (£85.6 million) or more in sectors including Healthcare and Financial Services. The investment will be paid for in cash.

The terms of the deal dictate that Cilantro Acquisitions Ltd pays Spice shareholders 70 pence in cash for every Spice share held. Cilantro Acquisitions Ltd was formed at the direction of funds managed and advised by Cinven. The investment will be financed via a combination of equity and debt funding, said Cilantro Acquisitions. The two previous rejected offers are Cinven’s initial bid pegged at 56 pence in cash, and a second bid pegged at a range of 62 to 65 pence that Spice’s board rejected.

Spice rejected Cinven's offers, saying they were opportunistic and significantly undervaluing. The new offer price of 70 pence for each Spice Share represents a premium of about 40.7% to the closing price of 49.75 pence per Spice Share on June 14, the last business day before Spice's announcement.

Martin Towers, Spice chief executive said Cinven will take a long term perspective on Spice’s business with a view to sustaining continued delivery of outstanding service levels to Spice’s customers and opportunities for its employees. At the same time, the offer represents an attractive combination of value and certainty for Spice Shareholders, he added.

29 Sep 2010.