Osmond launches £500m buyout fund

ENTREPRENEUR Hugh Osmond will this week announce plans to float a £500m turnaround vehicle on the London Stock Exchange.

The Horizon fund, expected to list before the end of January, will target one large investment in a consumer-facing business. Advisers from Osmond’s private equity firm Sun Capital have drawn up a long list of prospective companies which were bought out at the peak of the M&A boom but now need refinancing.

The aim will be to find a good quality business whose cashflows are being diverted to service huge debts, restricting its ability to invest. It is understood that bookmaker and bingo hall group Gala Coral, where equity has been wiped out and control has passed to the company’s creditors, is the type of investment being considered.

A source said the Sun Capital team was running the rule over a number of privately held companies. The final candidate will have an enterprise value of between £1bn and £5bn and could be a consumer-facing business with a smaller financial services arm.

An insider said: “The problem is that companies were bought out in the run-up to 2007 with high leverage on the expectation that 2007’s EBITDA [earnings] would be repeated, and clearly that didn’t happen... Horizon is going to solve the problems of one such business.”

Fundraising is understood to be at an advanced stage after a series of meetings with institutional investors in December.

Osmond will take a key role in the venture. Mike Fairey, former deputy chief executive of Lloyds TSB, will serve as chairman while Terry Eccles and Baroness Kingsmill have been hired as non-executive directors.