ICG Enterprise Trust has announced the sale of its investment in Micheldever Group Ltd (Micheldever), reportedly the second largest distributor of tyres to independent retailers in the UK, to Sumitomo Rubber Industries. ICG Enterprise held Micheldever directly and through Graphite Capital Partners VI (Graphite VI). Combined, Micheldever was ICG Enterprises’s largest underlying investment at 31 October 2016. Taken in isolation, ICG Enterprise says that the effect of the disposal is to increase its NAV per share by 13.2p to 826.7p, equating to a 1.6% increase compared with the value at 31 October 2016.
Graphite VI backed the £84.5m management buy-in/buy-out of Micheldever in February 2006 and ICG Enterprise says that the sale to Sumitomo Rubber Industries Ltd, for £215m, represents a return of 3.7 times cost and an uplift of 41% to the gross carrying value at 31 October 2016. The transaction is subject to EU Competition Commission approval and net cash proceeds to ICG Enterprise of approximately £35.9m are expected to be received in the quarter to 30 April 2017.
ICG Enterprise says that, over the last few years, the realisations of investments made since the financial crisis have generated relatively stronger performance than those from vintages before the financial crisis. It also says that pro forma for the sale of Micheldever, post-crisis investments comprise 87% of the Company’s portfolio at 31 October 2016. The Company’s results for the financial year ended 31 January 2017 will be announced on 18 April 2017.
ICG Enterprise Trust sells its investment in Micheldever Group : ICGT