Private equity firm 3G Capital branches out with $7.1bn Hunter Douglas majority stake deal

3G Capital's investment approach was developed by Brazilian billionaire financier Jorge Paulo Lemann. Reuters

Private equity firm 3G Capital sealed its first big deal since 2015, when it agreed to buy a majority stake in Netherlands blinds and window shutters maker Hunter Douglas at an enterprise value of about $7.1 billion.

Best known for its investment in the food and drinks sector through companies such as Kraft Heinz, 3G Capital will pay €175 a share to buy a 75 per cent stake in Hunter Douglas, the companies said on Friday.

Founded by Henry Sonnenberg in 1919, the Rotterdam-based maker of Luxaflex and Levolor blinds employs 23,000 people worldwide and had sales of $3.5bn last year. The Sonnenberg family will keep a 25 per cent stake in the company.

Hunter Douglas shares soared 70 per cent to €172.20 ($194) by 1015 GMT, just below the offer price. The deal is priced at a 64 per cent premium to its all-time closing high of €106.40 hit on September 8 this year.

The Sonnenbergs had offered €82 per share in May to take the company private but the proposal failed to win sufficient support from shareholders.

“3G Capital has deep respect for Hunter Douglas, its diverse portfolio of brands and the steadfast leadership of the Sonnenberg family over three generations,” said Daniel Schwartz, co-managing partner and Alex Behring, co-founder and co-managing partner of 3G Capital.

After the deal is concluded, David Sonnenberg will take on the role of executive chairman, succeeding his 87-year-old father Ralph Sonnenberg.

“As a private enterprise, Hunter Douglas will have the opportunity to advance and expand our business while preserving the family-led culture and strong relationships with stakeholders which have been core to our success,” said David Sonnenberg, who is now co-chief executive of the company.

Joao Castro Neves, a senior partner at 3G Capital, is expected to serve as chief executive, the statement said. Neves is also a board member of Kraft Heinz.

3G made its name in corporate America by putting together big debt-funded M&A deals followed by major cost-cutting.

Its approach, developed by Brazilian billionaire financier Jorge Paulo Lemann and Brazilian bankers Marcel Herrmann Telles and Carlos Alberto Sicupira, was pioneered at Budweiser brewer Anheuser-Busch InBev which they helped turn into the world's biggest beer company through a series of major mergers.

3G Capital also brought together fast-food chains Burger King and Tim Hortons in 2014 in a $11 billion deal.