* Agrees price of 70 pence per share
* Cinven already eyeing new deals, overseas growth
* 41 percent premium to share price before bid approach
(Adds Cinven partner comment, deal valuation)
By Simon Meads and Lin Noueihed
LONDON, Sept 27 (Reuters) - Private equity firm Cinven is to buy Britain's biggest water meter installer Spice for 251 million pounds ($397 million), and said it had its eye on several deals to expand the business.
The acquisition is a rare recent example of a private equity firm looking to take a business out of the glare of public markets in a so-called primary deal, in contrast to a spate of pass-the-parcel deals between buyout firms.
Spice gave its blessing to a raised 70 pence a share offer on Monday, after rebuffing two earlier offers.
The price represented a 41 percent premium to the share price on the last day before Spice said it had been approached.
"We can obviously deploy more resources to help it grow both organically and through acquisitions. It is a great platform to do more with what is clearly a very good company," Cinven partner Pascal Heberling said in an interview.
Cinven has already identified a number of acquisition targets, ranging from smaller bolt-on businesses to larger potentially transformational deals, Heberling said.
Heberling also said there was an opportunity for Cinven to bolster Spice's "embryonic" business in the United States, where the company recently said it was making progress and was in active discussions with a number of potential customers.
Spice was founded in 1996 through a management buyout from Yorkshire Electricity. The company handles outsourced services for leading utilities companies including EDF Energy and Thames Water.
The deal including debt values Spice at about 9.5 times last year's earnings before interest, tax, depreciation and amortisation (EBITDA) of 38.5 million pounds.
Spice knocked back a first approach at 56 pence a share in May and a second improved offer of 62-65 pence in July.
Simon Rigby, founder and former chief executive of Spice, said earlier this month 70 pence a share would be a "tidy" amount, though it remained a far cry from highs of 130 pence reached in 2007.
Among private equity's deals for public companies, Bridgepoint agreed to buy British care homes group Care UK for some 281 million pounds earlier this year, while HgCapital sealed a 179 million deal for generic drugs maker Goldshield. ($1 = 0.6318 pound) (Editing by Will Waterman)