European Capital is looking to triple the £100m investment it made in the British luxury paints company Farrow & Ball eight years ago, either through a direct sale or a flotation.
The private equity firm held talks with various investment banks in April over options for the business and has now clearly decided to proceed with the disposal of its 72%`majority stake, as the improving UK economy bodes well for the company’s medium-term prospects. It has hired Rothschild to advise it on the process, from which it hopes to raise up to £300m.
Founded in 1952, Farrow & Ball sells decorative paint for interior and exterior use as well as wallpaper. Its renowned shades include Elephant’s Breath, Dead Salmon and Nancy’s Blushes, and the company turned over £50m in the year to March 2013.
The paints industry in Europe has recently attracted big US rivals such as PPG Industries and Valspar, and the UK is currently considered to be one of the most promising markets.