ECI inks first deal from new fund

ECI Partners has made its first investment from its freshly-raised ECI 10, acquiring a majority stake in salary sacrifice car scheme provider Tusker.

The firm has acquired the stake from late stage venture capital fund Smedvig Capital. Financial details of the transaction were not disclosed. ECI declined to comment on the acquisition beyond the statement.

Launched in 2008, Tusker operates a scheme through which organisations can offer their employees new cars at a lower cost than on the retail market. Employees can opt to sacrifice their salary to pay for the vehicle and – as the salary is sacrificed before tax and National Insurance contributions are deducted – are therefore able to save money on buying a new car.

Smedvig initially invested in Tusker in February 2000, and has invested a total of £3.7 million in the business, according to its website.

Tusker now manages more than 13,000 vehicles, a figure which is expected to increase by 30 percent over the next 12 months. According to company CEO David Hosking, the business is generating revenues “in excess of £100 million”.

The existing management team of CEO Hosking, CFO David Brockwell, COO Mark Sinclair, and CCO Iain Carmichael will remain in place, and will be joined by newly appointed chairman Richard Prosser, who replaces Sir Trevor Chinn who is stepping down, Tusker said in statement. Prosser was formerly non-executive chairman of CarTrawler, a former ECI portfolio company which was acquired by BC Partners in March 2014.

ECI closed its tenth fund on its £500 million (€626 million; $823 million) hard-cap in September last year after just five months in market. The firm officially launched the fundraising in April, targeting £400 million, and held a first close on the vehicle on £350 million in July.

Earlier this month the firm booked a 6.1x return for ECI 9, a 2008-vintage £437 million (€589 million; $665 million) vehicle, on the sale of machine-to-machine network Wireless Logic to CVC Capital Partners. Financial details of the transaction were undisclosed.

The Wireless Logic sale was the third divestment from ECI 9. The sale of CarTrawler to BC Partners generated a 6x return, and last October the firm sold XLN Business Services to GSO Capital Partners, a division of the Blackstone Group, in a deal generating a 3x return. Together these three exits have returned more than 80 percent of the fund to investors, PEI reported previously.