3i, the FTSE 100-listed alternative investment firm, has bought DruckChemie, a European printing services company, for €133 million ($205.6 million) from SG Capital Europe, a buyout affiliate of Société Géneralé, a French bank, and Quartus, a French mid-market buyout firm.
DruckChemie provides chemicals, such as alcohol and specialty cleaning products, for professional printers. It stores, uses and disposes these chemicals for printing companies. The company has around €75 million in sales and has a consistent CAGR growth of between 7 percent and 8 percent during the last five years, according to Ulf von Haacke, a 3i partner.
Von Haacke said: “The business operates on the ‘milk-round principle’. It doesn’t deliver upon receiving an order, but comes at regular intervals. We believe this is a different approach to all of its competitors, and we think financially and businesswise this is enabling it to grow quite nicely alongside a stagnating market [in the wider printing industry].” He said 3i believes the chemicals market serving the printing industry will continue to be necessary despite the decline of the printing industry.
“We see a lot of potential to further grow the business beyond its present high growth rates.” He said this would involve a wider expansion of the business beyond its core markets in France and Germany, and a further professionalisation of its sales operation.
Quartus and SG Capital Europe bought the business in December 2005 when it had sales of €60 million.
3i has been one of the most active private equity investment firms since August, benefitting from its diversified strategy, allowing it to keep investing despite the limited amount of credit available for deals generally.
This week it agreed its take-private of Civica, a public sector-focussed software and services provider, for £237 million (€299 million; $462 million). It also provided SLR Holdings, a UK environmental consultancy, with £32.5 million in growth capital for a significant minority stake, bought from ISIS Equity Partners, the UK mid-market buyout firm. This valued SLR at approximately £100 million.