BoS forms JV with Fairview

Bank of Scotland’s joint ventures division has teamed up with Fairview management in a deal that enables a successful exit for 3i.

Fairview, the UK construction firm which was taken private by BoS and 3i in late 2000, has signed a £75m joint venture agreement with the Scottish bank that it hopes will enable it to get a toehold in the residential property development market.

The firm was taken private by 3i and Bank of Scotland at a price of £375m in December 2001, with the two firms acquiring an 80 per cent stake with management holding the remainder. In addition to funding Fairview’s development, the £75m agreement between Fairview and BoS will see the two firms acquire 3i’s reported 40 per cent stake in Fairview, thereby enabling a successful exit for the UK private equity firm.

A large portion of the original £375m paid for Fairveiw was satisfied using debt. This has subsequently been paid off, meaning that 3i has achieved a significant return on its reported £2m equity investment. 3i was unavailable to comment on the deal.

Bank of Scotland has a joint ventures portfolio of around £3bn which its Corporate Division has created across almost 50 joint venture investments since the inception of its JV team just under three years ago.