The City tycoon best-known for his tumultuous ownership of the music company EMI will this week unveil a £100m deal to secure the long-term finances of Britain’s biggest garden centre operator.
Sky News has learnt that Wyevale Garden Centres, which is owned by Guy Hands’ Terra Firma Capital Partners has struck an agreement with Hayfin, a specialist lender, after months of talks.
Barclays and Lloyds Banking Group are also said to be involved in the refinancing, which will come as Wyevale narrowly avoids the embarrassment of a public censure by filing its annual accounts days before a mandatory deadline.
The garden centre group trades from more than 150 sites around the UK, but has faced a turbulent period of trading, prompting an overhaul of its management team.
Terra Firma has previously explored a sale of Wyevale but is thought unlikely to attempt a repeat until it reports a significant improvement in its financial performance.
The refinancing comes at an important time for Mr Hands, who – as Sky News revealed in July – is attempting to raise his first buyout fund since losing control of EMI in 2011.
If successfully completed, the move will mark a notable return to the mainstream private equity industry for Mr Hands, who in recent years has relied on backers to fund acquisitions on a deal-by-deal basis.
Mr Hands is seeking to raise roughly 3bn Euros from investors, according to insiders.
His plans underline the tycoon’s confidence that the recruitment of Justin King, the former J Sainsbury boss, and Andrew Geczy, a former Lloyds Banking Group executive, have rehabilitated Terra Firma’s reputation.
Mr Hands has been aided by handsome returns generated on earlier Terra Firma investments, including Infinis, a waste recycling business, and Tank & Rast, a German motorway concessions operator.
Among Terra Firma’s other current investments are Four Seasons Health Care, the nursing home operator, which has improved its operating performance despite concerns about the industry backdrop and the company’s capital structure.
During the summer, Terra Firma announced a £4bn refinancing of Annington Homes, a residential property owner, in a deal which included £550m of new equity from existing investors.
Mr Hands has also raised money for individual deals including the purchase of McDonald’s Nordic master franchise of 435 restaurants and Welcome Hotels in Germany.
It is the ill-fated debt-laden takeover of EMI in 2007 that Mr Hands has been most closely associated with for the last decade, however.
Despite growing its profits, a combination of the financial crisis and strained relations with Citigroup, EMI’s biggest lender, meant that Terra Firma was unable to refinance its debt.
The Wall Street bank eventually seized control of the British music group, sparking a bitter legal battle lasting more than five years.
Mr Hands abandoned the fight last year, saying that the passage of time had impaired his memory of events.
Terra Firma declined to comment.
Source: Sky News