IK nears third exit with Etanco sale to 3i

IK Investment Partners is poised to sell French building materials company Etanco to 3i Group, set to be the buyout firm's third exit following this week's sale of Idex and last month's disposal of Magotteaux.

European private equity group IK Investment Partners is close to finalising the sale of French building materials company Groupe Etanco, according to banking sources. UK-listed 3i Group agreed to acquire the company late last month, with the firms in the process of finalising the secondary buyout, a source close to the deal said.

IK bought the business in February 2008 using capital from its 2007 fund. IK and 3i both declined to comment.

The deal, which is still subject to certain conditions being fulfilled, will be the buyout firm's third exit in recent months. This week, it sold French energy services business Idex to French fund manager Cube Infrastructure for an undisclosed sum. IK declined to comment on the size of the return generated by the exit.

The Idex deal follows the lucrative disposal of refined materials company Magotteaux last week. The €550 million sale, to Chilean conglomerate Sigdo Koppers, generated a 6x return for IK.

IK bought Idex from its founders, the Planchot family, in November 2004 for about €200 million according to the firm’s website. The investment was made using capital from the firm’s 2000 vintage buyout fund.

Under IK’s ownership, the number of employees at Idex has risen from 2,800 at the time of acquisition to 3,500 today, an increase of 25 percent. Net sales in 2004 were €380 million, rising by 40 percent to €525 million for the full year to February 2011, IK said.

IK Partner Dan Soudry, commented: “We wanted to strengthen Idex’s position as France’s largest independent energy and environmental services company by re-focusing on core activities, and pursuing dynamic organic growth while making selective acquisitions to enhance its geographic footprint. We saw a number of opportunities to improve operational performance, optimising the rotation of service teams and centralising procurement strategy.” 

JPMorgan, XK Corporate Finance and White & Case advised IK on the sale of Idex, while Morgan Stanley and Clifford Chance advised on the Magotteaux disposal.