After years of trying to pull-around this troubled part of its portfolio, on 29 April 2013, Rentokil Initial announced it had sold the entire share capital of City Link Limited to BECAP12 Fund LP (Better Capital), a private equity investor, for £1.
In the press release it stated that the current City Link management team, led by David Smith, will continue to run the business. Better Capital will invest £40m in the business to provide more than sufficient funding required by City Link to complete its turn-around plan. City Link reduced adjusted operating losses from £31m in 2011 to £26m in 2012.
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Alan Brown, chief executive of Rentokil Initial, said: “Rentokil Initial has decided to divest of City Link at this stage of the turnaround so that we can concentrate on our core international businesses in Pest, Hygiene and Workwear. The sale positions Rentokil Initial as a stronger and more focused group.” City Link started in 1969 with cab drivers taking parcels to Euston, where other cabbies would then pick up the parcels for delivery. Acquired by Rentokil five years ago, since when it has posted huge losses despite all Rentokil’s best endeavours to turn the business around. |
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Better Captial specialises in the provision of investment capital for the acquisition and turnaround of UK and Irish businesses, typically with a turnover of up to £500m. Better Capital does not focus on specific industry sectors instead looking for businesses which require operational and financial restructuring. They already work with a number of well known UK businesses including Jaeger, Spicers, Fairline and Everest. |
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