NORWICH City Football Club chairman Alan Bowkett has approached private equity outfit CVC Capital Partners to put together a bid to buy housebuilder McCarthy & Stone, following his resignation from the business last week.
Bowkett, who has also been non-executive chairman of house builder Redrow and once served as European adviser to CVC, resigned from the board on Thursday in order to pursue a bid.
CVC and Bowkett are now understood to be working on a £500m deal to take control of the company, which is the largest builder of retirement homes and flats in the UK.
Despite revenues of £257.7m last year and a 10 per cent increase in its underlying earnings, the firm currently has about £500m of debt on its balance sheet, consisting of £120m of high risk payment-in-kind loans and £380m of senior debt.
The company appointed global investment bank Moelis in November to advise it on what to do about the debt. A flotation of the company had been mooted but despite the successful initial public offering of housebuilder Crest Nicholson last month it is understood either a refinancing of the debt or an outright sale are the options on the cards.
A source close to the company said the business was “assessing strategic options”. Any offer made by Bowkett and CVC could be as many as five to six months away, another person with knowledge of the venture said.
A deal for McCarthy & Stone alongside CVC would tie in with Bowkett’s previous private equity credentials.
As well as once advising CVC, he also sits on the board of Montagu Private Equity and was chairman of Avio Group, which is currently owned by private equity outfit Cinven.
CVC, meanwhile, has a current investment vehicle, CVC European Fund V, which could provide the cash for a McCarthy & Stone deal.
It is understood CVC is also mulling a new fund aiming to match the €10.7bn the company managed to raise in 2008 for fund V.
ADVISERS MCCARTHY & STONE
McCarthy & Stone appointed boutique investment bank Moelis & Company as financial adviser to the board to help formally lead a strategic review into the firm’s debt pile. Though smaller than the traditional investment banking giants of Wall Street, Moelis has recently embarked on a global push to establish itself alongside rivals such as Greenhill and Evercore as an alternative to mainstream advisers. It currently advises the London Metal Exchange and has also been involved in debt restructuring projects with Dubai World and the Icelandic bank Glitner. Helping lead the Moelis team for McCarthy & Stone is restructuring expert and former chief executive of Close Brothers Corporate Finance, latterly DC Advisory, Stephen Aulsebrook. Aulsebrook is considered to be one of the most experienced bankers currently working in financial restructuring and has almost 30 years investment banking experience. Aulsebrook started his City career working at Hill Samuel and Bankers Trust. A trained barrister – he was called to the Bar by the Inner Temple after qualifying at the Inns of Court School of Law– he took a degree in law from the University of Leeds. He also attended the London Business School, taking its Corporate Finance Program.