March 18, 2011 – Investment funds advised by BC Partners (“BC Partners”) have today agreed to the purchase of Phones 4u, one of the UK’s leading independent sales channels for mobile phone connections and related insurance products, from Providence Equity Partners LLC (“Providence”). Terms of the transaction have not been disclosed.
Phones 4u supplies all major network and handset brands through its network of over 500 stores nationwide and through its online and telesales operations. Based in Staffordshire, the company reported 2010 sales of over £900m, growth of over 20% on the prior year.
Andrew Newington, Managing Partner, BC Partners, said: “With its market leading position, strong and trusted brand, multi-format strategy, and extensive store network, Phones 4u is ideally positioned to benefit from further strong growth in the smartphone market, as technological innovation and product evolution continues. We look forward to working with management, and investing further across the business to maximise its growth potential.”
Gustavo Schwed, Managing Director at Providence, said: "Over the last four and a half years, we have worked to increase the value of the business in partnership with Phones 4u’s outstanding management team. Together we extended the Company’s leading position in the UK mobile phone distribution market, particularly in the youth segment, grew its high street presence and maintained consistent, high cash flow generation. We thank Tim and the entire Phones 4u team for their contributions and are pleased that BC Partners will continue to back the management team as they address the many growth opportunities ahead of the Company."
Tim Whiting, CEO, Phones 4u, said: "I am delighted to have the backing of BC Partners. Their track record of growing businesses is hugely impressive, and I am looking forward to working with them in the years ahead. I also want to thank Providence for being tremendous partners to the Company. We appreciate their contributions to our success. Phones 4u is a truly unique brand with a great store platform. I am confident that we can continue to provide our customers the very best products and deals with outstanding service."
The transaction is subject to various regulatory approvals, and is expected to close in April 2011. BC Partners were advised by Global Leisure Partners and Goldman Sachs. Providence was advised by Deutsche Bank.
Phones 4u is an independent mobile retailer, offering all networks and handset brands and market leading choice and value. It is part of the Staffordshire-based 4u Group, led by Group CEO Tim Whiting. Leading the way in the mobile industry through its excellent customer service, award-winning advertising and differentiated in-store experience, Phones 4u has over 500 stores and is still growing. It has recently completed a refresh of its entire store estate. Phones 4u employs circa 6,000 people.
Phones 4u is a truly unique brand within the mobile sector, with a distinctive customer base. It is the leading independent mobile phone retailer among the youth market and is recognised for its success in engaging with this hard to reach audience through its stand-out advertising, social media and its market leading smartphone range. 1 in 4 new contract smartphones sold on the high street are through Phones 4u.
BC Partners is a leading international private equity firm with advised funds of approximately €10 billion. Established in 1986, the firm operates as an integrated team through offices in Europe and North America to acquire and develop businesses and create value in partnership with management. Since inception, BC Partners has made 74 investments with a total enterprise value of approximately €67 billion. Its consumer and retail related investments include Fitness First, Picard, Migros and Unitymedia, among others. More information about BC Partners can be found at www.bcpartners.com.
Providence Equity Partners is the leading global private equity firm specializing in equity investments in media, entertainment, communications and information services companies around the world. The principals of Providence manage funds with over $23 billion in equity commitments and have invested in more than 100 companies operating in over 20 countries since the firm’s inception in 1989. Significant existing and prior investments include Altegrity, Archipelago Learning, AutoTrader.com, Bresnan Broadband Holdings, Casema, Com Hem, Digiturk, Education Management Corporation, eircom, Hulu, Idea Cellular, Kabel Deutschland, NexTag, Ono, PanAmSat, ProSiebenSat.1, TDC, Univision, VoiceStream Wireless, Warner Music Group, Western Wireless and Yankees Entertainment and Sports Network. Providence is headquartered in Providence, RI (USA) and has offices in New York, London, Los Angeles, Hong Kong and New Delhi. Visit www.provequity.com for more information.