Hugh Osmond’s Horizon looks for £500m to invest in consumer sector

By Ben Harrington and Lawrie Holmes


Published: 10:41PM GMT 12 Dec 2009

Hugh Osmond, the pizza-to-pubs entreperenur, is back. Months after selling out
of insurer Pearl, Mr Osmond is seeking to raise £500m for an investment
vehicle aimed at acquiring distressed companies and funds in the consumer
sector.

The vehicle – called Horizon – will seek to raise the capital through an IPO
on the London Stock Exchange. Mr Osmond said he will focus on “consumer-facing
businesses, life insurance excluded”.

It will be the first new venture for Mr Osmond after retreating from Pearl,
which acquired Clive Cowdery’s Resolution for £5bn two years ago.

After failing to service £3bn of debt, Liberty Acquisition injected £510m into
Pearl in exchange for a 60pc stake, with a further 10pc going to its
creditors in exchange for wiping off £560m of debt. This left investors to
shell out £75m for the remaining 29.5pc of Pearl, which is set for an
imminent stock exchange listing.

In documents seen by The Sunday Telegraph, Mr Osmond said he is looking
for targets with an enterprise value of up to £1bn that are constrained by
their capital and ownership structure. The vehicle would “acquire the
business for cash and shares, restructuring the balance sheet and achieving
a full listing for the enlarged entity”.

Through his private equity firm, Sun Capital Partners, Mr Osmond said he had
received a commitment of around £25m. At least 15pc of the total available
equity is thought to have been acquired by Lansdowne Partners.

Mr Osmond has pulled together a team of City heavyweights to pitch the vehicle
to potential investors. They include Alan McIntosh, who was an executive
director and founder of Pearl Group with Mr Osmond and who was also finance
director of the pubs group Punch.

Other founders have worked with Mr Osmond on a number of deals, including the
unsuccessful £5.6bn battle for hotel and pub group Six Continents.

The team includes Matthew Allen, who worked with Mr Osmond on Pizza Express,
Marc Jonas, who helped Mr Osmond acquire Center Parcs UK in 2002, and Edward Spencer-Churchill,
son of the Duke of Marlborough.

Mr Osmond has also lined up Mike Fairey, former Lloyds TSB deputy chief
executive, as chairman of the new company, with former JP Morgan Cazenove
banker Terry Eccles and Baroness Denise Kingsmill as non-executive directors.

Mr Osmond and the other founders could not be reached for comment.

Mr Osmond has included details of his track record in the document. It said he
acquired and floated Pizza Express in 1994 for £15.7m – it was then acquired
by Gondola Holdings in 2003 for £279m.

It also details the £371m investment in Punch/Allied Domecq Retail in 1999,
which was sold for £993m in 2006.

He said Sun Capital had delivered an internal rate of return of more than 60pc
from 1997 to the present, compared to a private equity average return of
around 15pc between 1997 and 2005 and 4pc between 2005 and 2009.

The document referenced research in June 2009 from Coller Capital saying
Boston Consulting Group estimated that 20pc to 40pc of the largest 100
private equity houses will disappear.

According to Mr Osmond’s plans, Horizon is expected to be listed in early
January 2010.

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