The investment, which is subject to approval by the EU, UK and Australian authorities, as well as the positive result of due diligence, is expected to complete by the end of January 2007. CIR and Merrill Lynch will each acquire a stake of approximately 45 per cent in Oakwood with the remaining 10 per cent held by minority investors and Oakwood’s management team. On completion CIR will make a cash injection of approximately 100 million euro, and will undertake to fund the development of new initiatives of the Oakwood Group to be decided on jointly with Merrill Lynch, for a further financial commitment of around 50 million euro.
Commenting on the agreement reached, Rodolfo De Benedetti, chief executive of CIR, said: “This investment in Oakwood reinforces our strategy of expanding into high growth businesses with the potential of significant value creation. We are impressed by the results reached so far, by the commitment and the drive of Oakwood’s management team, and we are happy to partner with a leading global financial institution like Merrill Lynch.”
Commenting on the announcement, Mike Culhane, chief executive of Oakwood, said: “This investment commitment comes at a crucial time in Oakwood’s development. The company has grown to the point where we wanted to partner with long term strategic investors with the capacity to fund the development of our existing portfolio businesses, as well as financing our future activities. CIR and Merrill Lynch have the necessary financial agility, as well as offering important strategic benefits that will support the business over the long term. The calibre of investors we have attracted is a strong endorsement of Oakwood’s business and, with their support I am looking forward to the prospect of leading Oakwood to the next stage of its development.”
