Doughty Hanson could offload its 45 per cent share in Crewe-based distribution company as it begins review over its involvement
Private equity firm Doughty Hanson is considering selling its 45 per cent share in distributor 20:20 Mobile and is currently reviewing whether its involvement in the company is still viable.
Sources at Doughty Hanson say the stake in 20:20 Mobile is now under financial review, which could lead to a sale of the Crewe distributor.
An industry source close to the distribution channel said: “There is a review going on at present. It’s in the early stages of looking around and seeing what the options are. But there is a possibility that a sale could be the conclusion of the review.
“Private equity firms carry out these reviews every few years to see what their options are to maximise shareholder value by possibly selling their businesses. The Doughty Hanson board is looking at a number of options”
Details on the expected length of the review or names of potential investors are currently unknown.
Another industry source added: “Doughty Hanson wants to exit 20:20 and have alerted potential investors who are looking at the potential.”
20:20 Mobile admitted a review was taking place but it was “no way” certain the review would result in a sale of the Doughty Hanson share.
A 20:20 spokesperson said: “20:20 Mobile Group has private equity shareholders. Its board regularly monitors the best options for the business. It should come as no surprise that the firm is updating its assessment of the strategic options.
“The current review is at an early stage. It is not certain to result in a sale of the business.”
Doughty Hanson declined to comment.
Doughty Hanson created 20:20 Mobile Group after buying the handset distribution and logistics business from the Caudwell Group in 2006 for £347million.
In 2008, the group was financially restructured. A 45 per cent equity stake was given to the banks that financed the purchase. This reduced the loan debt from a reported £265 million to around £90 million.
The remaining 10 per cent of the business was sold to 20:20 directors Andrew White, Nicholas Smith and current group CEO Meinie Oldersma.
Four years ago Doughty Hanson estimated 20:20 Mobile’s value at around £120 million. A number of changes, including the sale of its 51 per cent share in 20:20 Ireland, will have affected its worth. Doughty Hanson declined to provide an updated valuation.
20:20 Mobile handled more than 10 million handsets and 21 million accessories in 2009.
20:20 Mobile Group’s retained profit fell from £57.3 million in 2008 to £40 million a year ago. Turnover in 2008 of £9.8 million grew to £14.8 million in 2009, but fell to £5.9 million last year.
The 20:20 Mobile Group serves more than 8,000 customers across Denmark, Finland, Germany, Hungary, Italy, the Netherlands, Norway, Spain, Sweden, Poland, Portugal, the United Arab Emirates and the United Kingdom.