Phoenix gets into UK logistics

3i has sold its minority shareholding in UK freight distributor Palletways in a secondary buyout, realising an IRR of 72 percent in just over two years.

UK private equity firm Phoenix Equity Partners has acquired a majority stake alongside management in Palletways, a Lichfield, England-based freight logistics distributor.

The transaction, financial details of which were not disclosed, provided a full exit for pan European private equity group 3i. 3i had invested £6 million (€9 million; $11 million) in a management buyout in April 2002. Selling the stake has produced an IRR of 72 percent, the firm said.

For Phoenix, it is the second investment of the year, following the backing in February of Jaycare, a UK packaging supplier to the pharmaceutical and healthcare sectors.

Phoenix made the investment from its £300 million Phoenix Equity Partners IV fund, which is approximately 50 percent committed at this stage.

According to Richard Daw, director of Phoenix, Palletways plans to develop its leading bespoke operating system into continental Europe, drawing on the experience provided by incoming chief executive, James Wilson. Wilson is a former European senior vice president of global distribution company TNT Express Worldwide.

Phoenix is a privately owned equity firm that manages four funds with committed capital in excess of £500 million. The group bought itself out of Credit Suisse First Boston in 2001 and focuses on five distinct sectors: financial services; leisure & retail; media; consumer & healthcare and transport & business services.

Shortly after the firm’s spinout from CSFB, the new entity invested in fashion shoe designer Jimmy Choo, working with Robert Bensoussan, a fashion and luxury goods entrepreneur.