3i Group has agreed to acquire an additional 49 percent stake in Scandlines, a ferry operator in the Nordic region, having originally invested in the business in 2007.
3i bought the stake from Allianz Capital Partners (ACP), the captive alternative asset investment platform of Allianz Group. It is understood the enterprise value was €1.25 billion, including debt.
The London-listed firm invested €165 million of equity in this transaction, with capital coming from its reserves for follow-on acquisitions for its Eurofund V, a €5 billion 2006-vintage. Following the transaction, which is expected to close before the end of the year, 3i will own 98 percent of the business.
As part of the acquisition, the company has refinanced its current debt facilities into a new €875 million package, which according to a 3i statement was “well received in the debt capital markets”.
3i and ACP initially invested in Scandlines in June 2007, when they both acquired 40 percent of the business. In 2010, they acquired an additional 10 percent each from Deutsche Seereederei, which owned 20 percent of the company.
Since 2007, 3i and ACP have strengthened Scandlines’ management team, carried out operational improvements and refined the business concept with an increased focus on customer experience, 3i said.
Scandlines has also been transformed from a state-owned company to a focused, short sea route specialist. In 2011, the company cancelled its long-distance freight routes to focus on its core business. A decision to build two new ferries for the Rostock-Gedser route will provide increased capacity to benefit from growth driven by Central and Eastern European traffic, according to 3i.
It is the fourth investment 3i has made so far this year. Last month, the firm agreed to acquire a 55 percent stake in management consultancy business JMJ Associates, in a transaction worth $175 million. In September, 3i backed German automotive testing company GIF in a deal valued at €100 million. In March, 3i agreed to acquire Brazilian eyeglass retailer Óticas Carol. In a conference call in July, 3i’s finance director Julia Wilson said it had recently seen investment opportunities picking up, particularly in Northern Europe and the US.