3i resurrects Eurofund V with CHRIST deal

LPs have allowed the London-listed group to make the €214m investment from its 2006-vintage fund

3i Group has agreed to buy a majority stake in CHRIST, a German jewellery company that was previously part of Advent International-owned Douglas Holdings.

London-listed 3i is investing approximately €214 million in the company, according to a 3i statement.

The firm will make the investment using capital from its €5 billion Eurofund V, according to a source familiar with the matter. As of March 2014, this vehicle was approximately 90 percent deployed. The fund’s investment period had already run out by December 2011, but 3i has been given permission from LPs to use equity from this vehicle, the source added.

CHRIST is working closely with Amor, another German jewellery business. LPs agreed to the transaction because 3i already owns a similar company and the two businesses can share best practices, the source suggested. However, it is understood this is not an add-on acquisition, as the businesses will continue to be separate.

3i declined to comment beyond the statement.

CHRIST, which is focused on the affordable luxury segment, employs more than 2,400 staff and has 220 retail outlets throughout Germany. It also has a growing e-commerce platform, which was launched in 2010.

Under the ownership of Advent and minority shareholder the Kreke family, CHRIST expanded into Austria, opening its first jewellery store in Vienna in 2013, Advent said in a separate statement. The firm did not respond to a request for further comment at press time.

3i said it would use its experience of the retail sector and its consumer portfolio companies, including Amor, Mayborn and GO Outdoors, to help internationalise the brand and grow the business further. It also previously invested in John Hardy, a jewellery business bought by consumer specialist Catterton earlier this year.

This is 3i’s second acquisition of 2014. In August, the group invested $110 million in A&A Manufacturing, a US-based global manufacturer of protective cover products, cable and hose carriers, roll-up doors and machinery door openers. Last November, 3i acquired a 55 percent stake in Dutch discount gym Basic-Fit for €110 million.

The investment comes as 3i continues its cost-cutting push. Last year, it reduced its outgoings £70 million (€86 million, $118 million) as part of its ongoing restructuring efforts, the group said in May. Total private equity divestment proceeds, including from the funds managed by 3i, were £1.1 billion, 3i said in its annual performance statement at the time. The improved performance led to a rise in the valuation of Eurofund V, which recovered to a 1.13x multiple of invested capital as of 31 March 2014, up from 0.93x at 31 March 2013.