Deal round-up 25/02/02

Phoenix continues Covenant expansion; Three exits for 3i; First deal for Albany’s third fund; Atlas Venture leads Arteris first round; Bridgepoint backs Hydrex buy-and-build.

Phoenix continues Covenant expansion

Phoenix Equity Partners, the UK private equity firm, has backed portfolio business Covenant Healthcare in its third acquisition since its formation in June 2002. Convenant has agreed to pay £15m to acquire the Gainsborough Clinic, a private medical and psychiatric hospital based in Central London.

Alongside Bank of Scotland Corporate Banking, Phoenix has now provided £65m to Convenant, which was established to lead a management buy-in at Abbey Hospitals in June. Covenant, led by chief executive Dr Magdy Ishak, also acquired Transform Medical Group in September.

Three exits for 3i

3i, the UK-listed private equity firm, has completed a trio of UK exits. The firm has sold Travelbag, a UK-based direct sales travel agent to E-bookers in a £5.3m transaction. 3i invested £2.5m in Travelbag in March 2000 and has reported a 30 per cent IRR on its investment.

The firm reported a 26 per cent IRR on its investment in NC2, a manufacturer of filter systems and equipment for marine engines. 3i invested £1.9m in a management buyout of the business from Walter Greenbank in 1989 and has now sold the business for £8.5m.

The third deal sees North East England-based ‘one price’ retailer Poundzone acquire portfolio business The Factory Shop, providing 3i and Bridgepoint Capital with an exit. Financial details of the transaction have not been disclosed.

First deal for Albany’s third fund

UK-based Albany Ventures has made the first investment from Albany Ventures Fund III, which held a first close on £22m in April 2002. The firm has led a £2.2m financing round for Meridian Technique, a UK-based developer of orthopaedic software.

Albany was joined in the round by Bank of Scotland Equity and Enterprise Venture Capital Trust. The funding will be used to improve support for Meridian’s customers and partners as the business expands into Europe and North America. Following the funding, Alan Watt, of Albany Ventures, will join the company’s board.

Atlas Venture leads Arteris first round

US venture capital firm Atlas Venture has led a $12m round of financing for French semiconductor start-up Arteris. Co-investors in the round include Crescendo Ventures, Techno Venture Management and Ventech. The company, which was founded in early 2003, will use the funds to develop chip design solutions.

Bridgepoint backs Hydrex buy-and-build

Bridgepoint Capital has teamed up with Bank of Scotland to finance an £8.5m acquisition by Hydrex, the UK-based specialist hire group. Hydrex, the subject of a Bridgepoint-backed £41m management buyout in March 2003, is acquiring Lyndsay, a UK based rail construction hire business.