Cinven gears up for £1bn float of annuity outfit

Michael Bow
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CINVEN, the private equity business, is firming up plans for a £1bn float of its annuity business Partnership amid a renaissance in London’s capital markets.

The mid-market buyout shop, which also owns PizzaExpress and ASK Italian restaurants, is understood to be pushing for an initial public offering (IPO) of Partnership in the second half of this year, although no firm date has been set.

Bank of America Merrill Lynch and Morgan Stanley have been lined up to advise on a sale of the annuity provider, which offers so-called death bonds – annuities geared towards people in ill health.

A float would be the latest in a string of mooted sales by private equi- ty firms keen to tap London’s resurgent equity markets after a dismal performance over the last few years.

The FTSE is at a five-year high at the moment and a spate of private equity backed mega-deals flowing out of New York have given renewed confi- dence to investors in London. Last week house builder Crest Nicholson, which was owned by American private equity firm Varde, got away a £553m float in London. Other firms owned by buyout shops, such as insurers esure and the AA, are also understood to be mulling floats.

Cinven is thought to be considering using a similar strategy used in its float of flight reservation provider Amadeus IT in 2010, when it retained a joint 13 per cent stake and sold down its holdings in several tranches.

Analysts at Panmure Gordon have previously pegged a float at around £1bn. This represents a huge premium on the £150m Cinven paid for Partnership in August 2008, when it bought the company from Phoenix Equity Partners.

Profits at Partnership soared 211 per cent last year to £37.7m – giving it the mantle as the fastest growing UK com- pany by profits. A person close to the company yesterday said: “Any IPO needs to be conditional on more favourable markets, and now there is a likelihood of moving in that direc- tion.” Cinven declined to comment.