A&O gives welcome boost to Welcome Break

Allen & Overy (A&O) helped Investcorp receive some long-anticipated good news by advising on Welcome Break’s £300m leveraged recapitalisation.

The recap of the UK’s second-biggest service station operator will return a £150m dividend payment to Welcome Break’s owners, Investcorp, as well as a return of capital to the company shareholders. The deal values Welcome Break at £500m.

The private equity house bought Welcome Break in 1997, a transaction on which A&O advised. Since then, A&O has advised on all of Investcorp’s Welcome Break-related deals. It is understood that in its 10 years as owner, Investcorp put more than £400m into Welcome Break.

The magic circle firm also advised on another restructuring of an Investcorp-backed company, Polestar.

Investcorp’s relationship partner, Ian Lopez, led the team at A&O, with banking partner Jacqueline Evans and real estate partner Carole Hopper.

As the deal was categorised as infrastructure, Investcorp was able to borrow significantly more at a lower rate of interest, said Lopez.

“Investcorp is now in a strong position to take the company forward,” Lopez told The Lawyer. A secondary buyout was one possibility among several “strategic options” that Investcorp now had, and on which it would hopefully instruct A&O. “We’ve been familiar with the asset since 1997,” he said.

Investcorp historically also uses Gibson Dunn & Crutcher for its US-based work and some of its European investments, including its €885m (£595m) disposal of parking company APCOA to Bredin Prat client Eurazeo.