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Rhône Group

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Rhône Group
Company typePrivate Ownership
IndustryPrivate Equity
Founded1995
FounderRobert Agostinelli
Steven Langman
HeadquartersUnited States New York, USA
ProductsPrivate Equity
RevenueUndisclosed to public
Total assetsIncrease $ 7.5 billion
Number of employees
100+
Websitewww.rhonegroup.com

Rhône Group is a private equity firm,[1] specializing in mergers and acquisitions leveraged buyouts, recapitalization and partnerships with particular focus on European and Trans- Atlantic investments.[2] Rhône also offers financial advisory services, strategic alliances, joint partnerships, and business valuation services.[2] Rhône is authorised and regulated by the Financial Services Authority (FSA).

Rhône is a closely held firm yet highly international with a gloabl reach.[3] Headquartered at Rockefeller Plaza in New York,[4] with additional offices in London and Paris. Rhône was founded in 1995 [5] by billionaire financiers Robert Agostinelli and Steven Langman.[6] The pair have been running and managing Rhône since inception along with their team who most of whom have been working together since the early 80’s [7] at Lazard and Goldman Sachs.[8]

Rhône Funds

Fund Vintage
Year		 Committed
Capital ($m)
Rhône Capital Partners Fund I 1996 $350
Rhône Capital Partners Fund II 2000 $700
Rhône Capital Partners Fund III 2005 $1,500
Rhône Capital Partners Fund IV 2008 $3,000
Rhône Clean Tech Fund I L.P 2010 $1,500
Rhône Group Oil & Gas Fund 2011 $1,500

Rhône Subsidiary's

  • RHONE GROUP L.L.C
  • RHONE CAPITAL I L.L.C
  • RHONE PARTNERS L.P
  • RHONE OFFSHORE PARTNERS L.P

OGFJ 2011

In 2011 the Oil & Gas Financial Journal (OGFJ), ranked Rhône Group globally among the top 10 Private Equity providers to the Oil and Gas Industry Sector. Other firms included Warburg Pincus, Natural Gas Partners, Kayne Anderson Capital Advisors, First Reserve Corporation, Lime Rock Partners, Quantum Energy Partners, Energy Capital Solutions LP, GasRock Capital LLC, EnCap Investments LP, Avista Capital Partners and EnerVest. [9]

History of private equity
and venture capital
Early history
(origins of modern private equity)
The 1980s
(leveraged buyout boom)
The 1990s
(leveraged buyout and the venture capital bubble)
The 2000s
(dot-com bubble to the credit crunch)
The 2010s
(expansion)
The 2020s
(COVID-19 recession)

Rhône Sector

Rhône seeks to invest in energy, materials, industrials, retailing, consumer staples, healthcare, and financial sectors. It focuses on investments in European and trans-Atlantic companies. The Individual investment range the firm seeks to invest in is between $50 million and $200 million in companies with enterprise values between $200 million and $1.3 billion. It prefers to invest in companies having a sales value between $100 million and $750 million and EBITDA between $25 million and $100 million. [10]

Notable Investments

Liverpool F.C.

In March 2010, English Premier League football club Liverpool F.C. revealed that Rhône were in exclusive negotiations to potentially buy the football club.[11] Rhône made a bid of £118.5 million for a controlling 40 percent stake in the Anfield club with an additional £25 million infusion of funds for transfers.[12] Liverpool F.C's managing director Christian Purslow and manager Rafael Benitez both gave Tom Hicks and George N. Gillett, Jr. their recommendations to go ahead with the deal however Hicks and Gillett failed to meet the April 6th 2010 deadline set by Rhône. As a result Liverpool F.C's £237 million debt to the Royal Bank of Scotland [12] is still outstanding and lack of fresh investment has meant plans for work to begin on a new £350 million stadium have stalled.[13]

In August 2010 Rhône re-emerged as a rival bidder in the takeover of Liverpool among other involved parties were, Chinese businessman Kenny Huang, Yahya Kirdi's Syrian consortium, the Kuwaiti Al-Kharafi family and Subrata Roy's Indian Sahara conglomerate. Liverpool's chairman, Martin Broughton appointed by Barclays Capital had hoped to identify a preferred bidder before the end of the transfer window, September 1, 2010.[14] As a result of not having achieved this investment, George N. Gillett, Jr. and Tom Hicks were obliged to pay a £20 million penalty to the Royal Bank of Scotland. RBS stated they were furious with Gillett and Hicks for rejecting Rhône's offer in March 2010.[15]

Quiksilver Inc.

In 2009 Rhône loaned Quiksilver $150 million over five years to help the company refinance a U.S. line of credit and consolidate its European debt.[16] The deal included $25.6 million in warrants which allowed Rhône to buy 20% of Quiksilver's shares making Rhône own a fifth of the company. Rhône also assigned two new directors for Quiksilver's board.[17]

Chairman of the Board, President and CEO Robert McKnight of Quiksilver, commented on the deal by saying; "Rhône is a strong strategic partner with an international presence and extensive experience investing in globally diversified businesses across a number of sectors. Our agreement with Rhône not only provides the financial stability necessary to complete our new Americas and European financing efforts, but it also allows us to improve our global business and increase the efficiency of our worldwide operations. We are pleased to have addressed our liquidity concerns so that we can now sharpen our focus on streamlining the business and making great products within our three great brands - Quiksilver, Roxy and DC Shoes." - "this is the cornerstone of Quiksilver's financial restructuring plan." [18]

The deal was regarded to be a 'lifesaver' for Quiksilver, which was initially struggling under the weight of their $560 million acquisition of French ski maker Rossignol. As a result Quiksilver announced it no longer planned to sell it's DC Shoes unit or any other brands it owned. Surfer Kelly Slater also signed a five-year extension of his endorsement deal with Quiksilver, and accepted a significant portion of his compensation in the form of the company's stock.[19]

In August 2010 Quiksilver completed an exchange of shares for $140 million in debt in a move that boosted the company's financial status. Quiksilver exchanged 31.1 million shares worth about $140 million for the debt, held by Rhone. The debt stems from the deal struck with Rhone last year that helped Quiksilver finance a U.S. line of credit and consolidate its European debt.[20] As the worlds largest maker of apparel and clothing inspired by surfing, skateboarding and snowboarding it is expected to rework credit lines with better terms and strike a deal to pay off $25 million in remaining debt owed to Rhone which now owns nearly a third of Quiksilver.[21]

Almatis

In 2007 Rhône sold Almatis, the world's leading producer of specialty alumina to Dubai International Capital LLC ('DIC'), the international investment arm of Dubai Holding. Dubai International Capital retained the existing management team and further supported the global growth strategy pursued by Almatis.[22] After almost 4 years of highly successful growth under the ownership of Rhône, DIC acquired Almatis for £1.2 billion.[23]

LWB Refractories

In 2007 Rhône bought LWB Refractories, the worlds leading refractory dolomite producer.[24] from Lhoist Group S.A. for undisclosed numbers.[25] In 2008 Rhône then sold LWB Refractories for $938 million.[26] to Brazilian manufacturer Magnesita Refratarios S.A. [27] The deal created what is now the worlds largest refractory manufacturer.[28]

InfOTE

In 2007 Rhône won the auction for the Greek Yellow Pages directories business InfOTE, trumping bids from three other private equity rivals and one trade player. Rhône acquired the business in partnership with buyout group Zarkona Trading for $450 million giving Rhône a 85% holding of the company and Zarkona with 15%. Rhône fought off competition from rival US media-focused buyout group Veronis Suhler Stevenson, UK-based private equity house Bridgepoint and DLJ Merchant Banking, the buyout arm of Credit Suisse, as well as Greek media group Antenna.[29]

Fraikin

In 2007 Rhône together with Eurazeo[30] and Pragma Capital sold truck rental company Fraikin to CVC Capital Partners for €1.35 billion.[31] Eurazeo owned 55%, Pragma Capital owned 13.75% and Rhône owned 20%.[32] The remaining percentage is owned by other minority shareholders and management.

Arizona Chemical

In 2006 Rhône bought Arizona Chemical for $485 million.[33] The deal officially closed in the first quarter of 2007. Arizona Chemical is the world's largest producer of Oleo Chemicals and specialty resins based on crude tall oil, a by-product of wood pulping.[34] Arizona Chemical manufactures pine tree based chemicals as fatty acids, rosin esters, and terpenes. These chemicals are used to manufacture a wide variety of products, including adhesives, household cleaners, hydraulic fluids, inks, paints, personal care products, and plastics. Arizona Chemical was formed in 1930 by paper products maker International Paper and American Cyanamid and is now owned by Rhône. Arizona Chemical filed for an IPO in 2010.[35] Arizona Chemical has been a global leader in pine chemistry for more than 75 years.[36]

UniEuro

In 2001 the UK's largest electronics retailer, Dixons bought Italy's most profitable chain of domestic appliance stores, UniEuro [37] from Rhône and JP Morgan for €368 million [38] to take controlling interest of nearly 96% of the company with an option to buy the remaining 4% for €30 million.[39]

See also

References

  1. ^ US private-equity group bids to take controlling stake in Liverpool, London: The Guardian, 14 March 2010, retrieved 2 November 2010
  2. ^ a b http://www.footballfancast.com/football-blogs/liverpool-takeover
  3. ^ http://www.allbusiness.com/manufacturing/primary-metal-mfg-alumina-aluminum/5575757-1.html
  4. ^ http://investing.businessweek.com/businessweek/research/stocks/private/snapshot.asp?privcapId=22689
  5. ^ http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=1920714
  6. ^ Barrett, Tony (15 March 2010). "Rhne Group makes offer for stake in Liverpool". The Times. London.
  7. ^ "Leading Swiss Bank Taps Three Top U.S. Executives for Key Positions; Robert F. Agostinelli, Sheldon S. Gordon and M. Steven Langman Join Union Bancaire Privee". Business Wire. 1996.
  8. ^ http://www.allbusiness.com/company-activities-management/company-strategy-alliances/7228889-1.html
  9. ^ http://www.ogfj.com/etc/medialib/platform-7/ogfj/articles/print-articles/2011-pdfs/1.Par.70070.File.dat/leading%20private%20equity.pdf
  10. ^ http://www.ogfj.com/index/article-display/9174994651/articles/oil-gas-financial-journal/capital/private-equity0/utex-industries_acquired.html
  11. ^ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agGKU.r4A68w
  12. ^ a b Smith, Rory (3 April 2010). "Rhone Group press Liverpool for answer to £110 million investment offer". The Daily Telegraph. London.
  13. ^ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agGKU.r4A68w
  14. ^ http://www.ft.com/cms/s/0/454f47c0-a320-11df-8cf4-00144feabdc0.html
  15. ^ http://www.clickliverpool.com/sport/liverpool-fc/1210267-gillett-and-hicks-facing-%C3%8220million-rbs-penalty-as-liverpool-fc-sale-process-drags-on.html
  16. ^ http://business.transworld.net/15771/news/quiksilver-announces-financial-restructuring-plan/
  17. ^ http://www.allbusiness.com/company-activities-management/financial-performance/12584718-1.html
  18. ^ http://investorshub.advfn.com/boards/read_msg.aspx?message_id=38720859
  19. ^ http://www.sportsbusinessdaily.com/article/130812
  20. ^ http://www.ocbj.com/news/2010/sep/03/quiksilver-slumps-weak-sales-outlook/
  21. ^ http://www.ocbj.com/news/2010/aug/24/quiksilver-sees-debt-rating-lifted-notch/
  22. ^ http://www.ameinfo.com/136817.html
  23. ^ http://www.mineralnet.co.uk/Article/1914334/Almatis-sold-for-1200m.html
  24. ^ http://www.mineralnet.co.uk/Article/2272132/Fire-at-LWB-Refractories-in-France.html
  25. ^ http://www.alacrastore.com/deal-snapshot/Rhone_Capital_LLC_acquires_LWB_Refractories_GmbH_Co_KG_from_Dolomies_de_Marche_les_Dames_through_a_leveraged_buyout-478426
  26. ^ http://www.highbeam.com/doc/1G1-189486704.html
  27. ^ http://www.accessmylibrary.com/coms2/summary_0286-35905163_ITM. {{cite news}}: Missing or empty |title= (help)
  28. ^ http://biz.yahoo.com/ic/125/125694.html
  29. ^ http://www.efinancialnews.com/story/2007-11-30/rhone-triumphs-in-greek-directories-auction
  30. ^ http://www.buyoutsnews.com/story.asp?storycode=41038
  31. ^ http://www.realdeals.eu.com/search/?search=eurazeo
  32. ^ http://www.abcmoney.co.uk/news/31200715111.htm
  33. ^ http://www.highbeam.com/doc/1G1-156101544.html
  34. ^ http://www.highbeam.com/doc/1G1-156067909.html
  35. ^ http://www.hoovers.com/company/Arizona_Chemical_Company/hcjxci-1.html
  36. ^ http://www.rttnews.com/ArticleView.aspx?Id=1267287
  37. ^ http://www.thisismoney.co.uk/news/article.html?in_article_id=357024&in_page_id=2
  38. ^ http://www.efinancialnews.com/story/2002-10-09/sssb-helps-dixons-renegotiate-unieuro-deal
  39. ^ Stevenson, Rachel (10 October 2002). "Dixons in £230m UniEuro takeover". The Independent. London.
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