3i has sold its minority shareholding in Witwood Food Products, a manufacturer of specialist food coatings for the frozen and chilled food industry. 3i will sell its shares back to the company in a deal which represents an IRR of 16.5% over the 11 years of its investment.
3i originally acquired a minority stake in Witwood in 1994, backing the management buyout led by chairman David Osborne. 3i has been a long-term partner in the business, backing the company through two further investment rounds in 1998 and 1999. This investment enabled Witwood to expand overseas into Australia and the Far East.
In April 2004, Bernard Cook, a member of 3i’s independent directors programme, joined the board as non-executive director. Cook has a wealth of experience of the industry, having worked at numerous food companies including United Central Bakeries, The Sandwich Factory and Whitworths Group.
Portfolio manager, David Bell, led the deal on behalf of 3i, with the shareholders receiving corporate finance advice from Morgan Atherton of KPMG. 3i received legal advice from Wragge & Co and Osborne Clarke advised the company.
Bell said: “Witwood has been a successful investment for 3i since we first acquired a stake over 11 years ago. The company has grown its sales and profits substantially and has expanded successfully overseas to become a market leader in its industry. We wish the management team every success for the future.”