3i moving on up

3i, one of Europe’s biggest private equity firms, has pulled off two management buy-outs in one day signalling a return to form for the group.

The first buy-out is A-Gas International, a speciality gases and chemicals company, this is the third deal 3i has backed in as many weeks. The firm has bought the venture from its founders and 50 per cent shareholders John Rutley and John Cooper.

The other deal is the £25m buy-out of Overseal Foods, a supplier of natural colours for the food and drinks industry from RHM, the UK food giant, owned by private equity firm Doughty Hanson. 3i is investing in Overseal on behalf of the Braes Group, a natural food ingredients company, to develop its product portfolio and to drive its expansion in the sector. Overseal is the fifth 3i-backed deal made by the Braes Group, since it was established in 1999, taking the buy-and-build total to £60m.

As reported on PEO last week, 3i recorded a decline on its portfolio of over £1bn, and made 185 people redundant as it closed seven offices. The group said net asset value fell by 22.6 per cent to 631p during the period, and the value of shareholders’ funds had reduced by 22.1 per cent, or £1.097bn, largely due to a dramatic fall in the valuation of its portfolio of both quoted and unquoted companies.

Total investment over the period was £600m, 33 per cent lower than investment to September 2000. 50 per cent of new investment was committed to technology companies, and 58 per cent was invested in existing portfolio companies.