Abu Dhabi Fund to Buy 30% of Domestic & General Group

(Bloomberg) -- Abu Dhabi’s sovereign wealth fund agreed to buy about a 30% stake in Domestic & General Group Ltd., the U.K. appliance warranty provider owned by CVC Capital Partners.

The deal with the Abu Dhabi Investment Authority is expected to close by year-end, Domestic & General said in an emailed statement Wednesday, which confirmed an earlier Bloomberg News report. It didn’t disclose financial terms. The transaction values Domestic & General, which is used by one-third of U.K. households, at just over 1 billion pounds ($1.25 billion), people with knowledge of the matter said.

CVC opted for a deal with ADIA, one of the world’s largest sovereign wealth funds, instead of an initial public offering of the business due to market uncertainty, one of the people said, asking not to be identified because the information is private.

Sovereign wealth funds have been stepping up direct investments as they seek to generate returns in a low interest rate environment. ADIA has teamed up with EQT Partners in its pursuit of Nestle SA’s $10 billion skincare business. The fund was also planning to buy out Vornado Realty Trust’s 25% stake in a Manhattan office tower, a person familiar with the matter said in June.

ADIA doesn’t divulge its assets under management, but it has been estimated to have about $696 billion. That makes it the third-largest in the world, according to data from the Sovereign Wealth Fund Institute.

Domestic & General has about 16 million customers globally, with a presence in 11 countries including the U.K., Spain, Germany, France and Australia, according to the statement.

CVC first invested in Domestic & General, which has about 2,000 employees in the U.K., in 2013. Since then, it has increased annual revenue from 633 million pounds to 811 million pounds, according to Wednesday’s statement. The buyout firm will transfer its remaining 70% holding in the business to Fund VII, which it raised in 2017, the statement shows.

To contact the reporters on this story: Dinesh Nair in London at dnair5@bloomberg.net;Sarah Syed in London at ssyed35@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Fion Li

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