Bridgepoint, the private equity company that bought Tunstall for £225 million in 2005, yesterday announced that it is selling 84% of it to another equity company, Charterhouse, for £514 million it was announced yesterday. Bridgepoint, which has a reputation for generally staying with its acquisitions long-term, is apparently keeping 18% and a seat on the board.
The money Bridgepoint is releasing is equivalent to 2.5 times its original investment, much of which, like the new money, was borrowed from the Royal Bank of Scotland.
[Comment: Selling this stake now, on the back of a large rise in Tunstall’s operating profits (expected to rise to £38m from £25m three years ago), appears to me to be a canny move on Bridgepoint’s part. It’s a rise that surely cannot be repeated this year, since I hear that in Tunstall’s home market many councils have been stockpiling its equipment this year out of the Preventative Technology Grant money. However, Charterhouse may see themselves getting into an expanding global market and, no doubt, received all the reassurance they need.]
Bridgepoint press release. (The Charterhouse press releases have not been updated since last November.)
The Tunstall press release, in its characteristically self-congratulatory way, bills the sale as ‘Charterhouse joins Tunstall team’ .