Alchemy sells back Regus UK holding

London-based private equity firm Alchemy Partners has agreed to sell the 58 percent stake in outsourced office provider Regus that it acquired three years ago back to the company.
 
Regus said that it has paid Alchemy £88 million (€127 million; $157 million) to acquire the 58 percent stake in the UK arm of the business, Regus UK, that it did not own.
 
A spokesman for Alchemy said that the firm had made a £35 million profit on the disposal, which represented an exit multiple of 12.2 times Regus UK’s 2005 EBITDA.
 
Alchemy paid £57 million to acquire the stake in December 2002 at a time when Regus was facing the prospect of defaulting on debt payments after failing to secure additional financing from its banks.
 
The buy-back is being funded by a £50 million loan from the Royal Bank of Scotland, Lloyds TSB and National Australia Bank, as well as a drawdown of £38 million from a £100 million revolving credit facility provided by the banks in mid-March.
 
Regus UK is a provider of services offices and business centres across the UK comprising 91 business centres and 25,000 workstations. The company currently has £21.8 million in net cash and reported £8.6 million of EBITDA and a profit after tax of £0.5 million on sales of £161.4 million.
 
Alchemy has been in acquisitive mode in recent months. In March of this year, the firm had a 270.5 pence per share offer for Parkdean Holiday accepted by the UK holiday parks operator’s board. The offer, which valued the business at approximately £135.3 million, had received acceptances from 64.6 percent of Parkdean shareholders at the beginning of this week.
 
In January, Alchemy completed the £42.5 million acquisition of AIM-listed Inventive Leisure, which operates a chain of vodka bars under the Revolution brand. The purchase closely followed the acquisition of 178 pubs from Spirit Group for £177 million in September 2005.