3i taps Chinese appetite for private equity buys

The UK firm has sold baby product company Mayborn Group to a subsidiary of Chinese financial services giant Ping An Insurance for a healthy return.

London-listed private equity managers 3i Group has sold Mayborn Group to Shanghai Jahwa, which is owned by Chinese insurance giant Ping An Insurance, in the latest example of Chinese appetite for private equity-owned global companies.

3i will receive £135 million ($198 million; €174 million) from the sale, generating a 3.5x return. It previously received £32 million through a refinancing in 2012, the firm said  in a statement.

Jahwa Group’s acquisition of Mayborn, which owns and manufactures baby brand Tommee Tippee, reflects the ongoing overseas shopping spree by Chinese corporates that ramped up in the first quarter of 2016. According to Mergermarket, there was a total of 398 deals in Q1 amounting to $92 billion. For private equity deals, there were more than 20 PE buyouts by Chinese corporates of private equity-owned assets worth $7.9 billion announced from January to March.

Top outbound deals for the first quarter include Qingdao Haier's acquisition of General Electric Appliances for $5.4 billion. In a China-Hollywood deal, Dalian Wanda bought US movie company Legendary Entertainment for $3.5 billion in cash.

State-owned ChemChina bought Syngenta in February in 2016 for $46 billion. Anbang Insurance Group had acquired Strategic Hotels & Resorts, owner of Waldorf Astoria, in March for $6.5 billion.

3i bought Mayborn in 2006 for £200 million through its 3i Eurofund IV, a 2003-vintage vehicle that raised £2.7 billion and takes majority investments in European mid-market companies.

The exit follows the firm’s recent sale of Frankfurt-based jewellery business Amor, from which it generated a 2.3x money multiple and proceeds of £89 million.

Under 3i’s ownership, Mayborn has expanded internationally, launched new products and acquired businesses in France and Australia. Its EBITDA tripled to over £25 million and net sales reached £130 million in 2015, with international sales now representing almost 60 percent of group revenue. 3i had also appointed Paul Mason as chairman of the company, who currently chairs retail chains Cath Kidston and Dr Martens.

3i has £13.5 billion assets under management across private equity, real estate and debt funds.

The transaction is subject to customary approvals.