Cinven strikes £251m deal for Spice

PRIVATE equity firm Cinven has won the race to buy utility support services group Spice with an offer that values the company at £251.1m.

Cilantro Acquisitions, a company formed by Cinven, will pay 70p for each Spice share compared to its initial bid of 56p in June.

The Leeds-based firm, which has sites in Altrincham and Lytham, Lancashire, has grown rapidly since it emerged as a management buyout from Yorkshire Electricity in 1996.

Cinven had already raised its valuation of the company to between 62p and 65p per share when the emergence of a rival bid earlier this month forced it to increase its offer a second time.

Martin Towers, chief executive of Spice, said: “This offer is good for customers, employees and shareholders. Cinven is a highly credible institution with substantial funds at its disposal.

“As an investor, Cinven will take a long term perspective on our business with a view to supporting continued delivery of excellent service levels to our customers and opportunities for our employees. At the same time, the offer represents an attractive combination of value and certainty for Spice shareholders.”

Spice directors will unanimously recommend that shareholders accept the offer at meeting expected to take place on November 4. In its last full year of trading, Spice recorded pre-tax profits of £31.5m on the back of revenues of £310.7m.

Pascal Heberling, a director of Cilantro Acquisitions, said: “We are delighted to be backing Spice as it looks to build on its strong market position serving its customers in the utility and energy sectors.

“In addition to Cinven’s sector expertise, Spice will also benefit from significant additional funds which will enhance its ability to grow organically and through acquisitions, as well as accelerate the development of its international capabilities.”