2 July 2002
(London, July 2) Legal & General Ventures ("LGV"), one of Europe’s leading private equity firms, is forming a joint venture with IWP International plc ("IWP") to effect a management buyout of IWP’s Household Products Division. The business is to be called Jeyes Group Limited ("Jeyes") and is being acquired debt-free in a transaction that values the business at €134.2 million.
Jeyes is primarily involved in the manufacture, distribution and marketing of products designed for the household cleaning and hygiene markets. In the year to 31 March 2002 it had sales of €295.9 million and operating profit before goodwill amortisation of €15.9 million.
Jeyes’ strategy is to focus on areas where it can achieve competitive advantage through technical competence and innovation. It currently offers a range of products in areas including:
- toilet care - through brands such as Bloo and Parozone it has achieved a 41% growth over the last two years leading to a UK market share of 14.9%;
- air care - technical innovation in this area has enabled it to grow the business by 91% over the last three years and achieve a UK market share of 15%;
- wipes - operating under the Wet Ones brand, Jeyes has a 57% brand share in the UK;
- cleaners - Jeyes Fluid is unique in the UK as an outdoor disinfectant . Based on a patent registered in 1877, it continues to be highly regarded by consumers; and
- insect control - The Globol insecticide brand was first launched into the German market in 1928 and today has a German brand share of 22%.
Jeyes’ products, which also include Tiger Tim and De Toren firelighters, are distributed in over 60 countries. In order to strengthen its market position, Jeyes has increased marketing expenditure on existing brands such as Bloo and Parozone and has a highly active new product development programme.
The joint venture will be effected by LGV managed funds acquiring a 44% shareholding in Jeyes, IWP will retain a 35% stake with the balance held by the management team of Jeyes, led by Chief Executive Mike Colley. The debt is being provided by Bank of Scotland, Barclays and Scotiabank.
In addition to its equity participation, IWP will receive €101 million in cash. IWP will use the cash proceeds from the transaction to reduce its borrowings. The deal is subject to IWP shareholder and regulatory approval. For LGV this investment represents another example of its strategy in working with trade partners where appropriate. Two thirds of LGV’s investments involve working with a trade partner or founder.
Commenting on the transaction, Ivan Heywood, Managing Director, LGV, said: "Jeyes is an excellent fit with LGV’s investment criteria. It is a consumer products business combining own label, third party and branded goods that will benefit from investment in brand
