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Allianz sells vending machine operator Selecta to KKR

Published 12/10/2015, 11:00
Updated 12/10/2015, 11:09
Allianz sells vending machine operator Selecta to KKR
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FRANKFURT (Reuters) - Allianz Capital Partners (DE:ALVG) (ACP) has sold its majority stake in vending machine operator Selecta to buyout group KKR (N:KKR), drawing a line under its own private equity business.

Allianz did not disclose a price for the Swiss-based group, but two people familiar with the deal said that it got only a small purchase price for the stake.

Selecta, which ACP bought in 2007 for 772 million pounds ($1.19 billion) backed by 690 million pounds of loans, marks the insurer's last direct private equity investment.

The company has refocused on infrastructure investments after several of its investments ran into trouble.

ACP lost its investment in Manroland, acquired in 2006, in the 2011 insolvency of the printing machine group. In 2013, ACP sold its stake in Scandlines at a lower valuation than it had agreed to when it acquired the ferry group in 2007.

Like the other two investments, Selecta proved as an example of highly leveraged buyout deals struck in boom times proving unsustainable as Europe's economy went into recession.

Selecta ran into difficulties in repaying its loans, and in 2012 ACP tried but failed to sell Selecta as offers fell short of a level that would have repaid Selecta's debt.

By late 2013, Selecta's second lien loans were quoted at 50 percent of face value and the company's mezzanine loans were trading at 10 percent of face value.

But in 2014, KKR agreed to provide a 220 million euro ($251 million) quasi-equity payment-in-kind loan to Selecta, which helped it to avoid a debt restructuring. At the time, KKR also received warrants enabling it to take up to 40 percent of the company in a potential sale.

KKR has also invested in German coffee machine and kitchenware manufacturer WMF, and Gruppo Argenta, Italy's second largest vending and coffee services company, which last year received an 100 million euro investment from KKR Credit.

Selecta operates 145,000 vending machines, employs 4,500 people, and serves more than 6 million consumers daily with coffee, cold drinks and snacks.

The group posted earnings before interest, taxes, depreciation, and amortisation of 123 million euros on 714 million in sales in the 12 months to June 2015.

KKR is buying a stake in Selecta of more than 90 percent with minority investor BlueBay staying invested.

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