Private Equity News & Analysis

IK, co-investor in €186m shipping exit

Industri Kapital has sold its 60% stake in shipping services company MacGregor Group to Kone Corporation for a return of 2.5 times its original investment.

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European private equity house Industri Kapital and healthcare technology company Gambro have sold MacGregor Group, a cargo shipping service business, to Finnish engineering company Kone Corporation in a deal valuing the business at SEK1.65 billion (€186 million; $245 million).
 
A sources close to the deal said that the realisation generated a money multiple of 2.5 times IK's original investment.
 
MacGregor is a Finnish cargo shipping company that provides marine cargo equipment and services to ship-owners, ship operators and shipyards. Its products include hatch covers, cranes, galleys, cargo securing systems and refrigeration systems.
 
The company was first acquired by Incentive Group, now known as Gambro, in 1993 for an undisclosed sum. Five years later IK's 1997 private equity fund bought a 60 percent stake for SEK900 million. Incentive retained the remainder of the company.
 
IK says that the company has grown under the firm’s leadership, citing the expansion of its Asian operations. Last year its net sales were approximately SEK3.2 billion and it employed 1,000 people.
 
Once the relevent competition authorities have approved the transaction, MacGregor will be integrated into the Kone's Cargotec division.
 
Industri Kapital manages roughly €4 billion in fund commitments from European and international institutional investors. Its current portfolio includes 26 companies with a total turnover of more than €9 billion.
 
MacGregor is IK's sixth exit of 2004. Previous realisations this year have included the €300m secondary buyout of French industrial engineering company Groupe Fives-Lille by Barclays Private Equity France, and the sale of Labeyrie to European food producer SIF for an enterprise value of €332.3 million.
 
The sale of MacGregor is the final step in Gambro's divestment of assets related to Incentive. The deal results in a capital gain for Gambro of about SEK 400 million and releases about SEK 595 million in liquid funds, including repayment of MacGregor's debt to Gambro.