Abu Dhabi, UAEFriday 15 November 2019

Adia acquires CVC's 30% stake in British appliance warranty provider

Domestic & General is one of the largest home appliance care specialists in the UK

Adia is is buying into major UK warranty firm D&G. Delores Johnson / The National
Adia is is buying into major UK warranty firm D&G. Delores Johnson / The National

Abu Dhabi Investment Authority (Adia) is buying a 30 per cent stake in Britain’s home appliances care specialist Domestic & General from private equity investor CVC Capital Partners.

Adia is buying the stake through its fully owned unit Luxinva, D&G said on Wednesday. CVC Capital, which manages approximately $76 billion (Dh279bn) of assets, will continue as the majority owner of the company, D&G added, without divulging the financial details of the transaction or when it will close.

The transaction values the appliance warranty provider, which is used by one-third of UK households, at little more than £1bn (Dh4.58bn), Bloomberg reported. CVC Capital is opting to sell a stake instead of an initial public offering due to market uncertainty, it said. The deal is expected to close by the end of the year, according to Bloomberg.

“With Adia’s investment alongside CVC’s ongoing commitment, we will have a new ownership structure underpinned by two stable and well-resourced global investors,” said David Tyler, chairman of D&G. “It is a strong platform enabling us to focus on our growth plans in the UK and internationally.”

Since CVC’s investment in 2013, D&G has grown annual revenues to £811 million from £633m, expanded its operations across Europe, and is currently exploring further international opportunities. The company offers protection services for approximately 23 million domestic appliances for about 16 million customers in 11 countries, said the company.

Adia, which does not disclose its assets, is the third-biggest fund – after Norway and China – that invests on behalf of the government, according to the Sovereign Wealth Fund Institute. It holds directly, or through its subsidiaries, investments across various asset classes including equities, fixed income, real estate and private equity.

Established in 1976, Adia has invested in private equity since 1989 and has built a significant internal team of specialists with experience across asset products, geographies and sectors. Its private equity department invests in credit products and ventures globally, often alongside external partners, and through externally managed primary and secondary funds.

D&G's stake purchase is the latest among a string of acquisitions by Adia. Last month it bought the remaining 25 per cent stake in 330 Madison Avenue from Vornado Realty Trust, gaining full ownership of the Manhattan property. Adia, which has owned 75 per cent of the office block close to the Grand Central Station for about three decades, bought the stake through one of its subsidiaries, a spokesman told The National at the time.

The fund has between 5 per cent and 10 per cent of its portfolio invested in prime real estate.

In April, Adia and India’s National Investment & Infrastructure Fund (NIIF) agreed to buy a 49 per cent stake in the airport unit of Indian conglomerate GVK Power & Infrastructure. A wholly owned subsidiary of Adia, partnered with India’s Kotak Investment Advisors in February to set up a $500m fund that seeks non-performing loans in Asia's third-largest economy.

Updated: July 10, 2019 02:37 PM