European buyout figures may start the new year with a bang should Apax Partners close a deal to buy ISS, Denmark's second-largest company in terms of turnover, from EQT Partners and Goldman Sachs.
Apax has bested rival private equity consortiums for an $8.5 billion buyout that would include a $5 billion debt package, according to media reports that note the exclusivity period is for two months. Should a deal come to fruition, signicant co-investment is expected to come from Singaporean sovereign fund GIC, which last year purchased a minority stake in Apax's management company.
Apax did not immediately return a request for comment.
Bain Capital had reportedly been leading a bid alongside Nordic Capital, The Blackstone Group and Clayton Dubilier & Rice, while CVC Capital Partners had teamed with Apollo Global Management.
ISS' main busines lines include providing cleaning services, property services like landscaping and building maintenance, security services, catering and admin support services to more than 200,000 business-to-business clients.
Goldman and EQT de-listed the Danish company in 2005, paying about $3.8 billion for respective stakes of 45 percent and 55 percent. The company has grown substantially since then.
In 2005, ISS employed 310,800 employees in 41 countries, had sales of approximately DKK 46 billion(today equivalent to $8.2 billlion, or €6.1 billion) and profits of DKK 2.7 billion. As of August 2010, it employed 520,000 people across 53 countries and in 2009 recorded DKK 69 billion in turnover and DKK 3.9 billion in profits.
Reports have indicated that advisors to the company's current financial sponsors are simultaneously pursuing a potential public listing.
Should a deal with Apax come to fruition, it would significantly boost European buyout totals, which have been slowly rising back from crunch-period lows. Secondary buyouts have been the main source of activity: in the first nine months of 2010 in the UK, for example, secondary buyouts accounted for nearly half (44 percent) of total buyout activity, with firms trading £5.5 billion-worth of investments between themselves, according to the Centre for Management Buy-out Research.
Apax is currently investing from its €11.2 billion Fund VII, which is just over 60 percent deployed. The firm last month agreed a $1.8 billion tertiary buyout of North American marketing agency Advantage Sales & Marketing.