Apax wins £1bn race for Travelex

The global private equity firm has beaten off interest from UK and US buyout houses to secure the world’s largest foreign exchange group, providing a £200m partial exit for 3i.

London-listed private equity firm 3i has sold the majority of its stake in global foreign exchange group Travelex in a cash transaction valuing the company at £1.055 billion (€1.53 billion; $2.02 billion). The deal is expected to close in July 2005.

Lloyd Dorfman, who held a 67 percent stake has reduced his shareholding to 30 percent and will remain as chairman and chief executive of the group. 3i will retain a 7 percent stake in the business going forward, having originally invested £24 million for a 32 percent stake in Travelex in 1998.

Although financial details of the transaction were not disclosed, Jonathan Russell, head of 3i’s buyout business, said in a statement: “This transaction realises a significant gain for 3i and for the investors in our buyout funds.”

A source close to the transaction said that 3i had made net proceeds of around £200 million on the disposal, having previously received £23.8 million in 2001 from the business.

Travelex was founded in 1976 and operates more than 700 retail foreign exchange branches around the world. In 2001, the company acquired Thomas Cook global and financial services company for £440 million.

The company appointed Deutsche Bank in December to conduct a strategic review and had received interest from a number of global buyout houses including the private equity arm of Goldman Sachs.

The news comes shortly after Apax’s announcement last week that it was merging with US mid-market buyout firm Saunders Karp & Megrue in a move designed to create a: “balanced global private equity firm” according to its backers.