The deal, the largest European private equity transaction in more than six months, follows four weeks of exclusive talks and generates a money multiple of 2 times for the sellers.
Cinven and Goldman Sachs bought Ahsell, of Stockholm, in January 2006 for €1.2 billion ($1.6 billion) and expanded it through 25 acquisitions to make it the Nordic market leader in the supply of goods including heating and plumbing products, electrical components, tools, machinery and refrigeration. The owners also switched sourcing to Asia, diversified its product range and lashed out "significant capital expenditure," most recently to build a Norwegian central warehousing facility.
Ahlsell's 2011 revenue rose 6.1% to Skr20.4 billion and Ebitda climbed more than 28% to Skr1.7 billion, the sellers said.
Founded in 1877, Ahsell is led by president and CEO Göran Näsholm, who will remain in place.
CVC Capital Partners Peter Törnquist and Søren Vestergaard-Poulsen said in a statement:
"Our acquisition of Ahlsell offers an exciting platform for growth, both organically and through acquisitions, and we look forward to working with the management team to help the company realise its long-term potential."
Prior to entering exclusive talks CVC beat off BC Partners Ltd., Bain Capital LLC and Nordic Capital, the Swedish private equity firm which sold Ahlsell to Cinven and Goldman Sachs Capital Partners in January 2006.
The sellers' advisers, Goldman, Sachs & Co. and Nordea, conducted a limited auction for Ahlsell having received preemptive offers from two of the four finalists. Goldman Sachs and Nordea were also part of a syndicate providing stapled financing for the transaction.
CVC is one of the most active dealmakers in the market at present. In early January CVC agreed to buy control of collateralized loan obligations manager Apidos Capital Management LLC from Resource America Inc. Late last year CVC agreed to sell Belgian specialty chemicals company Taminco NV to Apollo Global Management LLC for about €1.2 billion and Dutch grocery chain C1000 BV to rival Jumbo Supermarkten BV for an enterprise value of €900 million.
Earlier this month CVC broke off talks to buy closed life insurance consolidation vehicle Phoenix Holdings plc, which is worth about £3.4 billion ($5.4 billion) including debt.
The Ahsell deal is the largest private equity agreement in Europe since BC Partners agreed last July to buy cable company Com Hem AB for Skr17 billion from Carlyle Group and Providence Equity Partners LLC, according to Thomson Reuters.
The completion of the Ahlsell transaction is subject to customary competition clearances.
CVC was advised by Deutsche Bank AG; law firms Roschier and Freshfields Bruckhaus Deringer LLP; KPMG LLP; and Boston Consulting Group. Financing was led by Nordea, Deutsche Bank AG, Goldman Sachs, Barclays Capital, DNB ASA and Danske Bank A/S.
Cinven partner Guy Davison and Goldman Sachs Capital Partners Managing Director Steven Sher handled the exit for the buyout firms.