Arsys appears to be going under - quickly.
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Arsys’ growth has stalled since it was taken over by Carlyle and N+1 Mercapital in 2007. A statement from Carlyle at the time of the deal said that the company expected to generate revenues of over €40 million in 2007. A statement from Carlyle this week said that Arsys still generated revenues of €40 million in 2012, with earnings before interest, taxes, depreciation and amortisation of €15 million.
http://www.altassets.net/private-equity-news/carlyle-mercapital-to-acquire-arsys-for.html
Arsys’ growth has stalled since it was taken over by Carlyle and N+1 Mercapital in 2007. A statement from Carlyle at the time of the deal said that the company expected to generate revenues of over €40 million in 2007. A statement from Carlyle this week said that Arsys still generated revenues of €40 million in 2012, with earnings before interest, taxes, depreciation and amortisation of €15 million.
http://www.altassets.net/private-equity-news/carlyle-mercapital-to-acquire-arsys-for.html
Carlyle, Mercapital to acquire Arsys for €160m
The Carlyle Group and Spanish private equity firm Mercapital have agreed to jointly acquire web hosting and domain registration services provider Arsys for €160m. Carlyle and Mercapital will invest equally to acquire a majority stake in the business, while the company founders Luis Ignacio Cacho and Nicolás Iglesias will retain a minority stake. ...
Carlyle and N+1 Mercapital exit Spanish ICT services provider Arsys
Private equity firms Carlyle and N+1 Mercapital have exited their investment in Spanish information, communications and technology (ICT) services provider Arsys, which was acquired by United Internet subsidiary 1&1.
Arsys, which provides web hosting and domain registration services in Spain, France and Portugal, posted revenues of more than €40m last year.
Carlyle and Mercapital bought Arsys for €160m in 2007 in a deal which saw founders Luis Ignacio Cacho and Nicolás Iglesias retain a minority stake.
N+1 Mercapital managing partner David Estefanel said, “The integration of Arsys is 1&1 has been possible due to the strengths of the company, and the success of the strategy carried out since our entry.
“More importantly, it is also a clear proof of the growing interest of international investors in Spain, where there still a large number of middle market companies which, as Arsys, are flexible, competitive, and leaders in their market niche.”
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Recaps help Carlyle to Arsys returns
20 Aug 2013
Carlyle has made a 1.5 times return on the sale of Spanish Internet company Arsys to German trade buyerUnited Internet, despite selling it for less than its original purchase price.
Arsys has been sold to the Internet company's subsidiary 1&1 for €140 million, according to a statement from United Internet. The firm is now fully owned by United Internet's management. At the point of sales, Arsys will be a cash and debt free company.
The overall purchase price for Arsys in December 2007 was €160 million, according to a statement from Carlyle at the time ̶ €20 million more than the business was sold for this week. Carlyle and Spanish buyout firm N+1 Mercapital each acquired a 37.5% stake in the web hosting and domain registration business in 2007, with management taking a 25% share.
A person familiar with the deal said that Carlyle had made a 1.5 times return on its original investment by completing two dividend recapitalisations on the Spanish business over the course of its investment. The value of these is undisclosed. The person added that there was €20 million of cash on the books of the Spanish business when Carlyle and N+1 Mercapital bought the company.
N+1 Mercapital also made a 1.5 times return and participated in the dividend recap, according to a spokesman for the firm.
Dividend recaps, in which companies take on more debt to pay their private equity owners a dividend, were popular at the height of the buyout market. A total of 62 such refinancings worth €19.8 billion were completed in Europe in 2007, according toS&P Capital IQ data.
Last year there were only eight such transactions, worth €1.7 billion in total, but they have become popular again this year amid strong debt markets. There have been 16 such transactions worth €3.1 billion recorded in Europe so far this year, the highest level of activity since 2007, according to S&P Capital IQ.
Yesterday Financial News reported that UK mid-market private equity firm Exponentwas pursuing dividend recapitalisations for a handful of its portfolio companies. While last week, US private equity firm Hellman & Friedman turned to the debt markets to pay itself a dividend by refinancing Edinburgh-based energy research specialist Wood Mackenzie.
Arsys’ growth has stalled since it was taken over by Carlyle and N+1 Mercapital in 2007. A statement from Carlyle at the time of the deal said that the company expected to generate revenues of over €40 million in 2007. A statement from Carlyle this week said that Arsys still generated revenues of €40 million in 2012, with earnings before interest, taxes, depreciation and amortisation of €15 million.
A spokeswoman for Carlyle said in an emailed statement: “I think it is fair to say that most Spanish companies have stalled since 2007, so the figures probably aren't surprising.”
Arsys, which was founded in Spain in 1996 and employs around 300 people, will continue to be run by the current management team as an independent company, according to German buyer United Internet. Arysys has over 150,000 paying customers and operates in Spain, France and Portugal.
-- write to becky.pritchard@dowjones.com
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