3i has sold its 75% stake in Azzurri Communications, a UK converged voice and date communications company, to PPM Capital in a secondary buyout transaction valuing the company at £182.5m. 3i’s proceeds from the sale of £115m represent an IRR of 38% and a money multiple of 4.9x its initial investment.
Azzurri Communications was formed in June 2000, when 3i invested £25m for a majority stake in the company. Working closely alongside the management, 3i helped the company achieve its first phase of development involving the 15 strategic acquisitions that make up the business today. Headquartered in Newbury, Azzurri currently has sales and support operations in Fareham, High Wycombe, Kingston, Birmingham, Burnley, Hull, Leeds and East Kilbride.
3i introduced experienced private equity chairman Alan Cornish to the management team in 2002. Commenting on Azzurri and 3i, Cornish said: “Azzurri has been a classic private equity deal; a great management team, good market opportunity and a real focus on building value for shareholders.”
Citigroup advised 3i and Azzurri. Azzurri’s legal advisers were Osborne Clarke, with accounting and Ernst & Young provided tax advice.