Investcorp, the Bahrain-based investment bank, is selling 26 per cent of a US building equipment rental firm in a public offering of shares to be listed in New York. The bank also announced the acquisition of another US company that makes children’s clothes.
Investcorp says it is selling the 26 per cent of equity in Prime Service for a total value of $170.4 million, with an option for the issue’s underwriters to buy another $25.6 million worth of shares. Investcorp and its clients bought the company in 1994 in a transaction valued at $300 million.
‘Prime Service will use substantially all of the net proceeds from the offering to reduce outstanding indebtedness,’ the bank said in a statement issued on 5 November. It did not say whether this would clear the company’s outstanding debts, which would give Investcorp and its clients – mostly wealthy Gulf investors – a sizeable profit when the rest of the equity is sold.
Investcorp specialises in acquiring underperforming private companies in the US and Europe, reorganising them and taking them public. In 1995, Investcorp had a return on assets of more than 4 per cent, one of the highest of any bank based in the Gulf. Its shares have been the best performers on the Bahrain Stock Exchange this year.
The bank also said it had acquired William Carter Company, which makes clothes for children in partnership with the company’s management. Carter had net sales of $295 million in 1995.