Lyceum buy and build nets early exit

Business services specialist Lyceum Capital has sold health and safety company National Britannia Group after two and a half years to asset manager Connaught. Jeremy Hand, managing partner, said there was considerable interest.

UK buyout firm Lyceum Capital has sold health and safety company National Britannia Group to asset manager Connaught for £91 million ($183 million, €130 million).

The exit after two and a half years indicates exits at acceptable multiples will still be possible despite the problems in the credit market.

Jeremy Hand, managing partner at Lyceum Capital, said: “National Britannia is a good business and regardless of any market conditions there is always a price you can get for the right asset. There was considerable interest in the company not just from trade but from private equity as well. The markets are a little bit more sane but in our segment people are still looking for quality.”

The impact on the mid-market buyside was neutral despite the increase in financing costs. The price of debt has gone up, while multiples have gone down, he said.

The exit comes a day after Montagu Private Equity sold IT company Open International to trade buyer Towergate for £276 million.

Peter Alcaraz, managing director of merchant bank Close Brothers, which advised on the deal, said the trade buy was a reflection of current market conditions allowing trade rivals to outbid financial sponsors.

Lyceum has repositioned National Britannia Group since buying it in March 2005 for £25 million as well as making eight bolt-on acquisitions for a total of £20 million. The buyout firm restructured the business into four divisions: inspection and testing, information services, advisory services and training.

The company’s sales rose 81 percent and EBITDA tripled during Lyceum’s ownership. The buyout firm took the group’s turnover to more than £50 million in July through its largest acquisition, buying rival Corporate Health & Safety Solutions for an undisclosed sum.