Caudwell Group Sells for £1.5bn

The Caudwell group announced yesterday afternoon that it has signed a definitive agreement with two private equity firms to sell the entire group for £1.46 billion.

Private equity firms Doughty Hanson & Co and Providence Equity Partners will acquire the entire Group.

Under the terms of the acquisition Doughty Hanson will retain the 20:20 Logistics Distribution Group, to be renamed the 20-20 Mobile Group, and Providence Equity Partners will acquire the Phones4U Group.

15 per cent of the group was owned by Brian Caudwell and Craig Bennet (FD) with John Caudwell owning the remaining 85 per cent, meaning he can look forward to a £1.24bn windfall once the deal is completed in September.

On announcing the sale John Caudwell said:

“The sale process has attracted interest from a large number of high quality bidders and I believe that we have achieved a fair price for the business. The Group has had another year of excellent trading performance, which bodes well for its future prospects. With strong management teams across the business, I am confident we will see further growth in the coming months under the new ownership.”

“Selling the business will allow me to spend more time fulfilling personal ambitions, more time with my family and more time working with my charity. However, I also have a number of investment and commercial plans in the pipeline, which will allow me to maintain some interests in the business world.”

Initial media speculation in November 2005 valued the group somewhere between £800 and £1bn; however Caudwell has always suggested that the group was worth more.

This may be due to Caudwells clever management of expectation as figures published a month after the for-sale sign went out showed that group sales rose 15 per cent to £2.12bn, while earnings before interest, tax and goodwill came in at £149m – well ahead of the £115m predicted by the firm.

John said, "The group has had another year of excellent trading performance, which bodes well for its future prospects.

"With strong management teams across the business, I am confident we will see further growth in the coming months under the new ownership."

Phones 4U chief executive Tim Whiting added: "The existing management team are excited by this opportunity and are all committed to the future of the business."

Caudwell had always preferred a sale to a private equity firm rather than the competition in the hope that this would preserve jobs; however, private equity firms have a reputation for slashing costs as they seek a return on investment.

Watch this space…

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