3i makes three times money on Transalliance

3i has sold its stake in French transport group Transalliance for €20.5 million, realising an IRR of 80 per cent. The venture capitalist backed a €46 million buyout of the company in 2000. The sale to the company’s CEO Philip Michel gives 3i a money multiple of three times its investment.

At the time of the original deal Michel, previous owner of Transport Michel, took a majority stake in Transalliance (53 per cent), 3i took 40 per cent of the equity and SNBV Participations, a unit of Crédit Industriel et Commercial, took 7 per cent. The company was bought from the state through Consortium de Realisation, a unit of Credit Lyonnais. Michel is now taking advantage of the current low interest rates to re-gear the company and increase his ownership to 80 per cent. The remaining 20 per cent is owned by four VCs: Robertsau Gestion, SADE, Eurocapital (a subsidiary of Banque Populaire) and ILP.

Transalliance provides transport to the automotive, steel and food sectors. Its strongest market is in Northern France and Benelux. It has operations in Spain, Italy, Luxembourg, the Netherlands, Belgium and the UK, as well as France. The company’s turnover was €400 million, 80 per cent of which came from transporting general cargo and 20 per cent from logistics including warehouses. Its customers include Nestlé. Transalliance employs around 3,300 staff and runs 2,300 trucks.

Richard Campin, responsible for 3i’s French buyout activity, said: “We managed a difficult purchase from the state and worked closely with management to enhance both the business and the finance structure.” Under 3i’s ownership Transalliance’s debt was reduced by half, with truck financing changed from debt to finance leases. The company also sold non-core subsidiaries such as transport group Malherbe.