Safestore, Britain's largest self-storage operator, has raised more than £150m for its private equity owners from a stock market flotation a year after debt refinancing gave shareholders a £100m payout.
The company, which has grown largely by acquisition to leapfrog rivals Big Yellow Storage and Access, said yesterday that it raised £209m from floating almost half of the firm on the London market, putting a value on the business of £449m. Safestore's share of the sale will be £35m, the company said.
Private equity firm Bridgepoint will gain about £150m from the deal after pumping in £40m to back a management buyout and de-listing the firm from the junior Aim market in 2003 in return for an 80% stake in the business. In 2004 it paid more than £200m for much larger rival Mentmore. The debt used to pay for the company was refinanced last year at a cost of £247m of which £101m went to shareholders.
Critics of private equity have accused the industry of driving up profits for short-term gain based on cost cutting and tax avoidance. The industry promised this week to examine the need for greater transparency and ministers said they would look into alleged tax abuses.
Chief executive Steve Williams, who will sell a quarter of his £22m holding, said the flotation was the culmination of investment from its private equity owner. He said: "It was a loss-making business when it was taken over, which is unusual for private equity and our acquisitions were not just funded with debt but lots of Bridgepoint's own money. We've never cut costs. We've only invested in the business and Bridgepoint has supported that."
The firm, which has 80 stores in Britain and 19 in France, hopes to benefit from the growing trend for young people, divorcees and businesses to use self-contained storage facilities. The management, which includes about 40 members, will retain around 10.5% of stock.