CVC spots bargain in fund administration land grab

A man points at a computer screen showing stock information in this illustration photo taken in Bordeaux, France, March 30, 2016. REUTERS/Regis Duvignau

LONDON, Nov 12 (Reuters Breakingviews) - CVC is bulking up in the fund administration business. Amsterdam-listed Intertrust (INTER.AS) on Friday said it’s in talks about a 1.6 billion euro takeover by the buyout firm, which owns rival TMF Group. Both companies are based in the Netherlands and would together control about 30% of the Dutch market for administering accounts for funds, companies and securitisation vehicles.

The industry ranks high on private equity shopping lists. Earlier this year, Cinven lost a bidding war for Sanne (SNNS.L) after the London-listed company accepted a 1.5 billion pound offer from rival Apex read more . That deal put Sanne’s enterprise value at a punchy 29 times last year’s underlying EBITDA. After including net debt, CVC’s preliminary bid values Intertrust at less than 12 times.

The difference probably reflects Intertrust’s humdrum average annual sales growth of just 3% in the last two years; the broader industry is expanding at twice that rate. Once owned by Blackstone (BX.N), the company’s shares had slipped below its 2015 initial public offering price of 15.50 euros. CVC’s offer of 18 euros a share, 43% above Thursday’s closing price, looks relatively appealing. (By Karen Kwok)

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Editing by Peter Thal Larsen and Oliver Taslic

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