Advent Venture Partners, the UK venture capital firm, and LDC, Lloyds TSB's mid-market private equity firm, have completed a 72 million (€80.7 million) merger of their respective portfolio companies Snell & Wilcox and Pro-Bel. The companies provide technology solutions to the broadcasting industry.
Snell & Wilcox was the subject of a 22 million Advent Venture Partners backed MBO in 2002, whilst LDC funded the 11 million MBO of ProBel in November 2003.
LDC and Advent will have a majority shareholding in the company with management owning just over 20%.
The deal was supported by a 25 million package of senior debt and working capital facilities which was provided by The Royal Bank of Scotland and HSBC.
Kevan Leggett and Steve Carle from LDC, together with Peter Baines from Advent Venture Partners, will join the new company's board alongside non-executive chairman Gavin Simonds.
"The move to digital and high definition broadcasting across a number of media platforms is creating strong opportunities for a business with the scale and reputation of the new entity," says Kevan Leggett, managing director of LDC. "The ability of the enlarged group to develop new products from their combined bank of intellectual property offers significant revenue upside opportunities. We've brought together two very strong management teams who will also be able to capitalise on the cost synergies the merger creates to drive enhanced profitability. In the current climate this transaction is evidence that there are still opportunities to back good businesses by structuring highly robust and sensible deals around high quality managers which enable the companies to make the most of a sector with good long-term prospects."
Both UK-headquartered businesses design and develop hardware and software products used by the broadcast, production and postproduction industries to enhance the quality and integrity of content. Snell & Wilcox and ProBel's product ranges include digital routing, control, automation, signal distribution systems, production switchers and converters which are used by the majority of the world's major film studios and broadcasters including Sony Pictures, Warner Brothers, Turner, BBC, C4, NBC, CCTV (China) and HBO.
"We've worked closely with Simon Derry and his team who have transformed Snell & Wilcox and driven both growth and profitability," says Peter Baines, general partner of Advent Ventures. "We are delighted to continue backing the same team in an exciting new phase for the business."
LDC has, since 1981, completed over 400 investments and has ongoing interests in over 60 businesses across the UK. The firm backs companies seeking between 2 million and 100 million of equity for MBOs, institutional buy-outs or development capital transactions. LDC invests in a broad range of sectors and has particular experience in financial services, healthcare, industrials, IT and software, leisure and media, retail and consumer and support services.
Advent invests in both the technology and life sciences sectors having raised over 500 million since 1998 from institutional investors across Europe and the USA. Advent's technology investments include Cartesis, a growth capital investment sold to Business Objects for $300 million; Ubiquisys, a systems provider for residential in-building cellular coverage; Qype, a European local search and review site; Dailymotion, an independent video sharing site; and Echovox, a mobile micro-payment business.