Lloyds sells private equity arm to Coller Capital
Tuesday 06 July 2010
Lloyds Banking Group, which is 41 per cent owned by the British taxpayer, has agreed to sell its private equity business to Coller Capital.
The bank said the sale, worth £332m, was part of its plan to offload non-core assets. Under the agreement, Lloyds will retain a 30 per cent stake in a new joint venture with Coller, which will manage its investments, including the gentlemen's shirt-maker TM Lewin and Vue cinemas.
"Through this transaction, we are crystallising value in these investments whilst retaining an interest in the investee companies with which we have had positive relationships for several years," said Truett Tate, the director of wholesale banking at Lloyds.
The bank declined to give details of the private equity arm's recent performance. The unit, known as Bank of Scotland Integrated Finance (BOSIF), was acquired as part of the deal to merge with Halifax-Bank of Scotland in January last year. It has a portfolio of 40 companies.
Coller revealed that it had paid a "small premium" for the company but again declined to give details, adding that the premium was against Lloyds' valuation of the portfolio.
Under the deal, BOSIF's assets will be transferred into a new joint venture called Cavendish Square Partners, which will be 70 per cent owned by Coller.
"We are delighted to be partnering with Lloyds Banking Group in this joint venture, one of many complex transactions we have undertaken with banks over the years," said Jeremy Coller, the firm's chief investment officer.
"Our aim now, working closely with Lloyds Banking Group, will be to ensure the BOSIF companies have access to the resources they need to reach their full potential."
Coller said it would retain BOSIF's management team, including support staff who would manage the fund, and added that the portfolio was not distressed. The company holds investments in a medical products supplier Verna Group and Ainscough Crane Hire, based in Wigan.
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