3i has sold its majority stake in construction company Banner Homes to Rodaway Nominees in a transaction valuing Banner at GBP38 million excluding bank debt and providing 3i with a 28 per cent IRR on its investment.

3i invested in Banner Homes in January 1999, in a GBP22.1 million management buyout. According to 3i, the group has grown successfully since the buyout focusing on margin rather than volume growth. During the course of its investment 3i introduced chairman Terry Roydon and Mike Pacitti was the 3i-appointed board director.

Banner is a successful property developer focusing on premium homes in the home counties. It builds a range of accommodation from small flat developments to luxury houses. 3i also recently celebrated an exit from Fairview, another of its investments in the homebuilding sector, less than a year on from its public to private see evcj May, page 23. Also awaiting an exit opportunity in this sector is 3i’s 1998 GBP35 million investment in Morris Homes.