One of Britain’s biggest mobile phone distributors is in advanced talks to be swallowed up by a giant American rival in a deal worth about £200m, Sky News has learnt.
20:20 Mobile Group, which is owned by a consortium of shareholders including the taxpayer-backed Royal Bank of Scotland (LSE: RBS.L - news) (RBS), is close to being sold to Brightstar Corporation, which calls itself the largest specialised distributor of wireless products in the world.
The private equity firm Doughty Hanson, which is the biggest shareholder in 20:20, took control of the company in 2006 after buying it from John Caudwell, the billionaire founder of the Phones 4U high street retail chain, for close to £350m.
Investment bankers at Lazard are advising the board of 20:20 on the sale discussions, which are understood to have been underway for several months. The takeover by Brightstar is expected to be announced within weeks.
Brightstar is headed by Marcelo Claure, who founded the company in 1997 and has grown it from being a small Miami-based distributor into a global player which ranks as the 70th-largest private company in the US, according to Forbes magazine.
Until its sale by Mr Caudwell, 20:20 was the sister company to Phones 4U, which was itself sold to Providence Equity Partners, another private equity firm. Providence sold the high street chain to BC Partners, another financial investor, two years ago.
20:20, which is based in Crewe, Lancashire, distributes mobile phone products and provides outsourcing services to the mobile telelcoms industry. It employs more than 1200 people in 14 countries, including Hong Kong, Spain and the United Arab Emirates.
Like many private equity investments made at the peak of the buyout boom between 2005 and 2007, the owners of 20:20 have been forced to restructure the company’s finances.
In 2008, RBS and Mizuho agreed to swap £175m of debt for equity in 20:20 as part of a deal that also saw Doughty Hanson inject £15m of additional equity.