This article appeared on Forbes.com
The owner of Petco and Swiss watchmaker Breitling, based on the island of Jersey, is expected to begin trading on the Amsterdam Stock Exchange on Friday at a valuation of up to $16 billion. Figures that would allow at least two co-founders to become billionaires.
In the latest public offering in a context of booming European IPOs, the private equity firm CVC Capital Partners is expected to go public on the Euronext Amsterdam stock exchange on Friday. The company released its prospectus on Monday, outlining an included price range between 14 and 16 dollars (from 13 to 15 euros) per share and evaluating the company among the 14 and 16 billion dollars. Based on these prices, the co-founders debut Donald Mackenzie And Rolly van Rappard they would end up with a billion-dollar fortune.
Donald Mackenzie and Rolly van Rappard, billionaire assets
After the IPO, at that price, the 6% share of Mackenzie it could be worth $890 million. Mackenzie – who stepped down as co-chairman of the company on February 13, but is still on the board as honorary non-executive co-chairman – is selling a stake worth $130 million (after tax). That could increase by another 20 million if the company exercises its overallotment option. Since CVC is based in Jersey, a British crown dependency, it will likely not have to pay any capital gains tax on such sales. Also considering the declared ownership of the superyacht Grace, with an estimated value of 23 million dollars according to VesselsValue, Forbes estimates that Mackenzie, 67, born in Scotland, will have an estate of at least 1 billion dollars.
Van Rappard, the 63-year-old managing partner and other co-chairman, on the other hand, won’t be selling any of his shares. At the midpoint of the price range, its 6.7% stake will be worth $1 billion. Like Mackenzie, he also owns a yacht, the Blue II, worth an estimated $32 million per VesselsValue. It owns 50%, with the other half held by fellow CVC co-founder Steve Koltes through his Jersey-based Kaltroco family office. The yacht can also sail through sea ice in polar regions and has a sauna and steam room.
Born on the Caribbean island of Curaçao, the Dutch businessman, whose full name is Louis Rodolph Jules Ridder van Rappard, he lives in London. His Luxembourg-based family office, Steflot, had a net book value of $224 million as of its last filing in December 2022, including investment firm Imker Capital. Overall, Forbes estimates that Van Rappard has a net worth of at least 1.2 billion dollars. CVC representatives declined to comment.
Before the IPO, CVC will also pay a dividend of $327 million (before taxes) to its shareholders, a payment that would translate to approximately $23 million each for Mackenzie and Rappard and $14 million for Koltes.
The assets and investments of CVC Capital Partners
CVC was founded in 1981 as the European business of Citicorp Venture Capital, the venture capital arm of Citigroup. In 1993 Mackenzie, van Rappard, Koltes and five other co-founders (all of whom have since left the firm) acquired the firm and transformed it into CVC Capital Partners, raising $630 million for their first fund in 1996 and moving the their attention on the world of private equity. CVC now has $198 billion in assets under management with offices in 29 cities on six continents. It is best known for investments in sports, from its $2 billion leveraged buyout of Formula 1 in 2006 – then sold to Liberty Media for $8 billion (enterprise value) in 2016 – to the $2.1 billion deal. billion dollars in 2021 with the Spanish La Liga for an 8.25% slice of TV rights over the next 50 years.
CVC’s holdings include the pet food retailer Petcopurchased together with a Canadian pension fund for $4.6 billion in 2015, the online university platform Multiversitypurchased by Italian billionaire Danilo Iervolino in 2021, the Swiss luxury watch manufacturer Breitling and other high-profile sports investments, including the Women’s Tennis Association and the Indian Premier League cricket team Gujarat Titans.
“When we founded CVC in the early 1990s, our ambition was to create a multigenerational company that would continue to thrive long after the founders were gone,” Mackenzie said in a statement announcing his departure in February. “I believe we have achieved this goal. The company is in great shape and in good hands.”
The numbers of CVC Capital Partners
In 2023 CVC recorded revenues of 1.2 billion dollars, largely made up of $976 million in management fees, and an EBITDA (earnings before interest, taxes, depreciation and amortization) of $692 million. While this is a 3.5% increase over 2022, it is much lower than that of wealth management giants like BlackRock And Blackstoneor even European competitors such as the Swedish private equity firm Eqtall of which have annual revenues of at least $6 billion.
“They have a multi-pronged approach. They do private credit, providing credit opportunities to companies that don’t necessarily want to borrow from banks. They also have some pretty large infrastructure opportunities that they’re working on,” says Dean Kim, head of equity research at brokerage William O’Neil.
Infrastructure is a growing asset class for private equity, with BlackRock announcing a $12.5 billion deal in January to acquire Global Infrastructure Partners, an infrastructure-focused fund. In September CVC bought a 60% stake in Dutch infrastructure investment firm Dif Capital Partners for an undisclosed amount.
The macroeconomic context
CVC’s IPO could be held back by growing tensions in the Middle East and market pessimism over interest rate cuts in the United States, which have dragged down the share prices of BlackRock and Blackstone by 7% and 4% respectively. in the last month. But in Europe, where the European Central Bank is expected to cut rates soon, there could be stronger growth for asset managers like CVC.
“European asset managers should perform well in the long term because the ECB is about to cut rates,” adds Kim. “And when that happens, asset raising becomes easier, there is more liquidity in the market.”
CVC’s largest shareholder is the publicly traded private equity firm Blue Owl Capital, which bought a 10% stake in several CVC subsidiaries for around $1.1 billion in November 2021. It currently holds an 8% stake that will be worth $1.2 billion at the average price. The company, which has produced two billionaires – Doug Ostrover and Michael Rees – since going public in 2021, it will also purchase more shares in the IPO, for around $170 million, and will thus arrive at a 9.1% stake after the transaction.
The other co-founders
While not as rich as Mackenzie and van Rappard, either Koltes, the only other co-founder who still has a role at CVC, will see a significant increase in his assets. Its 4.2% stake will be worth approximately after the IPO 620 million dollars, plus about $30 million (after taxes) from share sales, which could grow to $34 million with over-allotment. The 68-year-old American stepped down as co-chairman of CVC in January 2022 and now serves as honorary co-chairman alongside Mackenzie, in a non-executive role. His family office, Kaltrocohas also invested in Mediterranean fast-casual restaurant chain Taim, automotive M&A consultancy Dave Cantin Group and German VC firm 468 Capital.
“CVC has long since overcome its dependence on a single individual or group of individuals. The company attracts, motivates and energizes a talent pool second to none. For every thing I can do well, there are dozens of people at the company who can do it better,” Koltes said in a statement when he resigned in January 2022.
Two longtime CVC executives, Rob Lucas and Javier de Jaime Guijarro, will retain all of their shares in the company after the IPO. At the mid-point of the price range, their shares will be worth $530 million and $520 million, respectively.
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