Permira plots first equity-only deal

The proposed £225m take-private of UK specialist life company Just Retirement will take Permira’s current fund to just under 60 percent invested. The deal is being led by James Fraser.

The board of specialist financial service group Just Retirement has recommended to shareholders that the company be acquired by Permira in a take-private transaction valuing the company at £225.5 million (€248 million; €$360 million). Under a scheme of arrangement, Permira will acquire the entire issued share capital of the company.

If the deal goes ahead, the private equity group will fund it fully with equity capital from the €9.6 billion Permira IV fund it is currently investing. For the fund, which was raised to invest in leveraged buyouts before the credit crisis began, it will be the first equity-only investment. Equity-only is a funding approach several private equity firms resorted to after the debt markets contracted.

When Permira invested $840 million in casino operator Galaxy in October 2007, it did so without leverage. As the business already had debt on its balance sheet, however, Permira did not consider it to be an equity-only deal, the spokesperson said.

James Fraser

In addition to purchasing Just Retirement’s shares, Permira has agreed to inject another £25 million to back the company’s expansion plans. Following the transaction, Permira IV will be just under 60 percent invested, according to a spokesperson.

Just Retirement sells financial products aimed at people approaching or in retirement. “It is well positioned, and is growing,” a Permira spokesperson commented.

According to Reuters, the company’s share price rose nearly 10 percent above the company’s closing price yesterday to just over half the 148 pence per share that the company went public at in November 2006.

Leading the deal for Permira is James Fraser, head of the firm’s financial services team. Fraser joined the firm in November 2008.

News of the agreement to buy Just Retirement comes days after Permira raised €177 million from selling more than half the equity it owns in German portfolio company Freenet.