3i seals double exit

The UK-listed private equity firm has this week sold engine manufacturer MWM for €580m and exited its minority stake in Balco, a developer of balconies.

3i group has sold MWM, a Germany-based manufacturer of combustion engines, to US-based construction equipment provider Caterpillar for €580 million.

The deal represents a 2.2x return on the original investment and an IRR of approximately 25 percent. 3i acquired MWM, or Motoren-Werke Mannheim, in 2007 in a €360 million deal.

Over the last three years, 3i has made “significant investments” in MWM’s production facilities, research and development platform and distribution network, said Peter Wirtz, partner and managing director of 3i Germany, in a statement.

MWM “has been internationalised and now has 11 global subsidiaries”, a spokesperson for 3i said.

MWM will be merged with Caterpillar’s Electric Power Division (EPD), a global supplier of engines and electric power systems.

Subject to regulatory approvals, the deal is expected to finalise in the coming months, the statement said.

Balconies: providing a nice
view for private equity

In related news, 3i Group has sold its minority stake in Balco to Stockholm-based private equity firm Segulah. Balco, a UK-based developer of balconies, has grown from a turnover of €16 million in 2001 to an expected €62 million for this financial year, according to a statement. The deal represents a 5x return on the group’s original investment.

The divestments mark a shift from the five months ended in August, in which the group’s investment rate outpaced its realisations, the value of which fell 71 percent compared to the same period last year.

3i will announce results for the six months ending 30 September in mid-November.