3i Group plc is in agreement to invest about €68 million ($75.71 million; £49.3 million) for a majority stake in EURO-DIESEL, according to a statement.
This transaction, 3i's fourth investment in the industrial sector in the past year, will allow 3i to support the Belgium-based company in growing its international sales organisation and to continue its product innovation endeavours. The company, which designs, manufactures and maintains diesel rotary uninterruptable power supply systems for global customers, has 12 subsidiaries and more than 40 distributors across the world.
“The partnership with 3i will bring new momentum to EURO-DIESEL's development,” the company's chief executive officer Philippe Gillain said. “We will benefit greatly from 3i's international network and experience in managing growth while improving operational performance.”
This announcement follows 3i's completion of its three-year business restructuring programme last week. The programme, which began in 2012, included debt reduction and a balancing of its net gearing ratio. Private Equity International reported last Thursday that the firm's net cash position was £49 million, up from a negative cash position of £160 million a year ago, and it had reduced the company size by 168 employees and six offices.
With this investment, Peter Grosch, chair of MWM Holding, will become chairman of the EURO-DIESEL board. Michael Tobin OBE, who was formerly CEO of 3i-backed Telecity, will become the board's non-executive director.
At the time of publication, 3i's share price was 547.00p, up 8.00p or 1.48 percent from the previous close, giving the firm a market capitalisation of £5.32 billion.