LONDON (Alliance News) - Better Capital PCC Ltd Tuesday said that Spicers and OfficeTeam, the office supplies businesses owned by BECAP Fund LP and BECAP12 Fund LP, have entered a transaction under which control of Spicers will be taken over by the BECAP12 Fund LP vehicle that owns OfficeTeam.
Better Capital PCC said that a wider capital restructuring will take place over the next few weeks.
Better Capital is a limited liability, closed-ended investment company. It has two protected cells: the Better Capital 2009 Cell, which invests through BECAP Fund LP in a portfolio of distressed businesses, and the Better Capital 2012 Cell which invests through BECAP 12 Fund LP in businesses with "significant operating issues" and may have financial distress.
The news comes just days after BECAP12 Fund LP's acquisition of OfficeTeam, on a debt-free basis for GBP80.0 million.
"The businesses will continue to trade separately in recognition of their differing market positions with care being taken to respect the interests of customers. The management of both Spicers and OfficeTeam believe that this transaction will provide considerable benefits to their customers," Better Capital PCC said in a statement.
The company said that the most important issue at hand was to demonstrate a fair division of ownership between the funds and said that it had been "mindful of the possible conflicts of interest" in such a deal.
"Given Fund II's [BECAP12 Fund LP's] completion of the OfficeTeam acquisition a few days back, attributing its cost as value for a transaction was demonstrably sensible," Better Capital PCC said.
It said that its has given "much careful review" to the valuation of BECAP Fund LP's investment in Spicers for its accounts which are to be published Wednesday.
"That valuation of GBP6.1 million based upon asset valuations, together with the GBP5.0 million recent loan from Fund I [BECAP Fund LP], will be used to arrive at the ratio between the funds and the resulting ownership will be 11.5% of the economic interest to Fund I and 88.5% to Fund II," Better Capital PCC said.
Better Capital PCC also noted that both ownerships will be subject to dilution by management in due course. It added that the GBP5.0 million loan will be absorbed into the transaction.
It said that steps have been taken to address the potential for conflict to arise from "the differing exit horizons" of the funds, referring to how and when the funds reduce their interests in investments.
"Both funds will independently have directorship and information rights and will be treated economically in proportion in all respects," Better Capital PCC said.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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