RLPE’s first deal provides 3i exit

Royal London Private Equity (RLPE) has closed its first deal, acquiring outsourcing firm Emprise from 3i in a £26m secondary buyout. RLPE has so far raised £71m for its debut fund and has invested £7.7m of this in the management buyout of Emprise. The Royal Bank of Scotland provided debt to support the transaction.

Stephen Barrett, now executive chairman, founded the outsourcing group in 1986. Emprise has become one of the UK’s leading providers of outsourced environmental and property services to private and public sector clients, with a turnover of £31m for the year to December 2002 and has around 2700 employees. Services offered include cleaning, manned guarding, security, waste management, landscaping and pest control.

3i invested in the company in 1996, committing a total of £300,000. In 2001 Emprise acquired Lawrence and Tester, a cleaning company operating in the retail sector. The company also expanded its manned guarding services through the acquisition of Wells Security. The return on 3i’s investment has not been disclosed. Emprise plans to continue organic growth in its core business areas, with the possibility of adding further services through acquisition.RLPE hopes to raise a total of £200m by April next year for its first fund. The firm is part of financial services group Royal London and its investors include Royal London Mutual Insurance Society and Morley Fund Managers. The firm is focused on the mid-market in the UK; its sector preferences include financial services, support services and leisure. Enterprise values of target companies are between £25m and £75m, with the fund investing between £10m and £20m in each business. Richard Caston of RLPE will be joining the board of Emprise.

PricewaterhouseCoopers advised the vendors.