| BUSINESSWEEK ONLINE : JUNE 14, 1999 ISSUE | ||||||||
| ||||||||
 | ||||||||
| INTERNATIONAL -- EUROPEAN COVER STORY
The LBO Trailblazer Conquering the Continent (int'l edition) It certainly doesn't have the same renown in financial circles that New York powerhouse Kohlberg Kravis Roberts & Co. enjoys. But in its own quiet way, BC Partners, a London buyout firm, has done as much as any group to usher in the age of the European leveraged buyout. John D. Burgess, a Briton, and Otto van der Wyck, a Dutchman, founded the firm in 1986 with a minority stake from the ill-starred British merchant bank Barings. Since then, BC Partners has participated in some 40 deals worth about $10 billion. Of those investments, 27 have been sold or taken public. And unlike other LBO shops with little track record on the Continent, BC Partners pursued deals there from the start. It has offices in Paris, Milan, and Hamburg. With Europe's business culture changing to favor buyouts, the focus is paying off for the firm's 17 partners. According to Burgess, returns are ''well in excess'' of 20% per year. Burgess, a graduate of top French management school INSEAD who began his career at Boston Consulting Group Inc.'s Paris office, uses long-cultivated contacts to ply his trade. Hostile takeovers are not part of his approach. The firm's first deal on the Continent, in 1987, was the purchase of French steel-spring maker Allevard. The company came to BC Partners' attention through Michel Guillet, a Frenchman whom Burgess was recruiting at the time. Allevard was later sold to steelmaker Usinor for about five times its purchase price. FAMILY AFFAIRS. Local connections paid off again in 1997, with the purchase of a controlling stake in Elis Group, France's leading provider of hotel and restaurant linens and work uniforms. Guillet, now a BC senior partner, persuaded Elis' septuagenarian owner to sell out for an estimated $1 billion. BC Partners is developing the business by adding acquisitions in the U.S. Springs and bed linens are good examples of the steady, low-tech businesses that appeal to Burgess. He likes to work with existing management, although bringing in a new chief executive or chief financial officer is often part of the deal when family owners sell out. Other recent investments include SEAT, the Italian yellow pages publisher; Neopost, a French supplier of postal equipment; and Ludwig Beck, a Munich retailer. In Burgess' latest coup, he landed Cantrell & Cochrane Group, an Irish liquor and beverages subsidiary of spirits giant Allied Domecq PLC. C&C was slated to be spun off in a stock issue. But market choppiness killed the offering, which Goldman, Sachs & Co. was handling. Goldman then tried the auction route for C&C, a market leader in such businesses as mineral water and cider in Ireland. Burgess interviewed C&C's management team and came away impressed. ''We felt they would do better as an independent company,'' he says. Allied agreed to Burgess' $860 million plan in January, after he came up with guaranteed financing from Donaldson, Lufkin & Jenrette Inc. Burgess plans to build up C&C through acquisitions, then take it public. Meanwhile, BC Partners will press on, uncovering the unglamorous, money-making companies that bigger, flashier firms might overlook. That's a smart route to LBO success in Europe. By Stanley Reed in London _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
|  |
 | |
 RELATED ITEMS Europe: Buyout Fever! (int'l edition) COVER IMAGE: Europe: Buyout Fever! TABLE: The Biggest Leveraged Deals CHART: Buyouts Are Booming in Europe The LBO Trailblazer Conquering the Continent (int'l edition) INTERACT E-Mail to Business Week Online | |||
