3i, the listed middle-market private equity firm, has agreed to sell its 21.6% stake in Cannon Avent, the UK-based provider of baby care products and car mats. The company is being sold to Charterhouse in a deal worth £300m, while the Cannon Automotive business will be retained by the Atkin family.
3i will receive proceeds of around £64m from the sale, representing a money multiple on its investment of 13 times and an IRR of 35%. The firm originally invested £5m of growth capital funding in Cannon Avent in 1995 in exchange for a minority stake. This investment enabled the company to reduce its gearing and to focus on growth overseas. The 3i deal team comprised Bill Anthony, director, and James Cox, portfolio manager. Cavendish Corporate Finance is advising the shareholders in respect of the transaction.
3i’s growth capital business focuses on investing minority stakes in high growth companies expanding organically or through acquisition. The business currently manages 300 investments across Europe and Asia with a value in excess of €1.8bn and invests across a broad range of industry sectors, including healthcare, financial services, food and drink, media and oil and gas.
Other recent exits at 3i include the sale of directory publisher Yellow Brick Road (YBR) in association with Veronis Suhler Stevenson. The asset was sold for €1.825bn to a consortium led by Macquarie Capital Alliance and including Macquarie Bank, Caisse de Depot et Placement du Québec and Nikko Principal Investments. YBR was created in March 2004 through the three-way merger of De Telefoongids, Fonecta and Mediatel.
On the investment front, 3i most recently backed a management buyout of Fairline Boats, the UK based manufacturer of leisure power-boats. (See page 12.)