Dec 1, 2006

Risk Capital Partners creates another full exit

Risk Capital Partners announces its fourth full exit in the past 15 months with the sale of its entire holding in Loewy.

The disposal of Loewy, the creative design and marketing services company generated a 2.5x cash on cash return and an IRR of 41%.

RCP’s other full exits include the sale of Signature Restaurants for £91 million, bingo operator Mayfair Gaming for £27.5 million and Integrated Dental Holdings for over £100 million. These four full exits have returned cash proceeds to RCP of £83 million, generating an aggregate 5.8 x cash on cash return and an excellent IRR.

Today’s announcement on Loewy follows hot on the heels of the recent 5.7x valuation uplift achieved on portfolio company Giraffe, announced in October 2006. 3i Group invested £10 million for a minority stake, with RCP retaining its entire holding.

Luke Johnson of RCP commented: “Today’s exit reinforces RCP’s successful investment-and-exit strategy, having achieved a strong return on our investment. The proceeds from this, and the other recent exits, will be utilized in new transactions in the very near future.”

Details on Loewy Investment:
RCP’s investment in Loewy was made in March 2004, backing the merger of Raymond Loewy International and Wilson Harvey to form Loewy as a buy-and-build vehicle in the fragmented marketing services sector. Since the original merger Loewy has more than doubled in size and expanded its range of activities through six acquisitions to include brochure production, PR and digital media.

Ben Redmond, who served on the Board of Loewy for RCP commented: “Loewy is a classic RCP deal. Having provided funding for the initial merger in an “off market” deal we worked with the management team in executing a profitable buy-and-build strategy. Underlying profit growth allowed the company to successfully refinance and our exit was delivered by means of a share buyback.”