One of the world’s largest secondary investors in private equity deals is taking a stake in British Engineering Services (BES), a specialist testing business which traces its roots back more than 150 years.
Sky News has learnt that Alpinvest, which is owned by the investment giant Carlyle, is to become a shareholder in BES alongside its existing institutional backer, Inflexion Private Equity.
The deal, which could be announced as early as next week, is likely to value BES at approximately £225m, according to a source close to Alpinvest.
It will involve Inflexion, which originally invested in the engineering inspection group in 2015, selling its stake from one of its funds to another.
City insiders said that Inflexion had sought independent advice from Rothschild, the investment bank, to help establish a “fair valuation” for BES.
The recruitment of Alpinvest as an external investor following a competitive process would reassure Inflexion’s limited partners that the transaction had taken place at an appropriate level, they added.
The so-called continuation deal reflects a growing trend in the private equity industry for buyout firms to sell companies between two of their own funds.
That enables individual backers to retain ownership of an attractive asset for longer than the typical duration of private equity backing.
BES employs hundreds of engineers, and traces its origins to 1859.
Inflexion bought a controlling stake in 2015 from RSA, the insurer.
Alpinvest and Inflexion declined to comment.