Warburg continues shopping spree with 'illiquid' deal

The US firm has been deploying cash consistently throughout the past month, most recently having invested $160m to acquire the ice-making business of Manitowoc. It is also set to exit electronic payment firm Metavante, which will be merged with Fidelity National Information Services to create a $10bn enterprise.

Warburg Pincus has acquired the ice manufacturing business of diversified manufacturer Manitowoc for $160 million, the latest in a string of investments the private equity firm has made in the last month.

Warburg picked up the business line – which includes operating entities Frimont, Scotsman Group, CastelMAC and Ice-O-Matic – after Manitowoc was required to divest itself of such assets in order to obtain approval from the US Justice Department and European Commission for its $2.7 billion purchase of Enodis last October. Wisconsin-based Manitowoc will sell the subsidiaries to Braveheart Acquisition, a corporation formed by Warburg Pincus.

Ice: Warburg's latest buy

The acquisition concludes what has been a busy month for Warburg, starting in early March with its purchase of a 10.3 percent stake in publicly traded UK conglomerate Premier Foods. Since then it has also increased its stake in municipal bond insurer MBIA to more than 30 percent, and most recently acquired a 5.45 percent stake in NASDAQ-listed financial information provider Bankrate.

Such investments, as well as its purchase in January of $175 million in stock belonging to Nuance Communications, have continued the firm’s strategy of tapping the PIPE market, with more than 20 percent of its investments being minority positions in public companies.

Yesterday, the firm also said it would exit electronic payment processing company Metavante, which is being acquired by Fidelity National Information Services (FIS). Metavante shareholders will receive a fixed exchange ratio of 1.35 shares of FIS common stock for each share of Metavante; the pro forma enterprise value of the combined company is approximately $10 billion. Warburg Pincus invested $625 million for a 25 percent stake in Metavante in 2007, when it spun out of US bank Marshall & Ilsley. The 2007 deal valued Metavante at $4.25 billion, including $1.75 billion in debt arranged by JPMorgan Securities and Morgan Stanley.