Nuclear exit for 3i

3i is selling its majority stake in NNC Holdings, the UK’s leading private sector nuclear services business. The sale to AMEC at an equity capitalisation of £25.3m will generate equity proceeds of £12.9m, representing a money multiple on 3i’s total investment of 3.1 times and an IRR of just under 30%.

NNC provides engineering solutions and safety consultancy services throughout the life cycle of nuclear facilities in the UK, Canada and across the former Soviet Union. In the year ended March 31 2005, it generated unaudited operating profits of £5.6m on a turnover of £86.6m.

3i backed the management buyout of NNC in September 1999 from GEC. At the time of the transaction, British Nuclear Fuels (BNFL) acquired a minority non-voting equity stake in the business, which it has also agreed to sell to AMEC, and Bank of Scotland provided senior debt and working capital.

Since the buyout, NNC has grown consistently, more than doubling its turnover. The company now has operations in the UK, Canada, South Africa, Eastern Europe and the former Soviet Union.

“NNC was restructured successfully into a consultancy and service provider,” said Alan Stevenson, a director at 3i. “Since the buyout from GEC, the company has grown organically, and through acquisition, to become the UK’s leading independent nuclear engineering service provider.”

NNC is also the largest private sector nuclear consultancy company in Canada, having started operations there in 2002. Since the buyout, the company has also broadened its client base across the nuclear industry to include the UK’s Ministry of Defence and Bruce Power.