EPIC sells private equity portfolio

4th Aug 2010 17:35

Equity Partnership Investment Company (EPIC) is selling its private equity portfolio to AIM-quoted EPE Special Opportunities.EPE is paying a total of £22m for assets valued at £26.4m at the end of January 2010. The consideration is in the form of £10m in cash, £10m of convertible loan notes and £2m of EPE shares - issued at 55.86p a share. The loan notes are redeemable at the end of 2015 and will receive interest of 7.5% a year. They are convertible at 170p a share. DES Holdings IV (A) LLC is investing £10m for a minority interest in the fund that EPE will set up to hold all the EPIC private equity interests and most of its existing holdings. EPIC is ending its life as an investment company at the end of July 2011. EPIC will have cash to cover the redemption of zero dividend preference shares. The deal will also provide liquid and semi-liquid funds to help redeem the income shares. Capital shareholders will have the opportunity to take EPE shares and convertible loan notes as part of their share of the distribution of EPIC's assets. The EPIC portfolio is managed by the same investment team as EPE's own portfolio. The EPIC portfolio includes loans and/or shareholdings in nine companies including electrical retailer and wholesaler Ryness, digital marketing agency Evolving Media, engineer Bighead, online pharmacy Pharmacy2U and schools operator Palatinate Schools. This will give EPE a much more diversified portfolio of private equity assets. EPE has four investments, including debt in former AIM company Whittards of Chelsea, the tea and coffee retailer.At 30p a share, EPE is valued at £7.96m and this deal is classed as a reverse takeover. EPE's last stated net asset value was 73.74p a share (end June 2010) and the post-deal NAV should be 69.83p a share. EPE wants to gain shareholder approval to buy back up to 25% of its share capital and cancel the share premium account.