Warburg seals win on ice-machine supplier

The firm, which is raising a $12bn fund, has agreed to sell Scotsman Industries for $575m – having already earned back its original $160m investment through dividends.

Warburg Pincus has agreed to sell ice-machine supplier Scotsman Industries for $575 million to Ali Group, an Italian food service equipment business, according to a source close to the matter. 

The firm, which bought the company in 2009 for $160 million using its $15 billion Fund X, had already earned its original investment back prior to the exit, having taken out $200 million in dividend payments, the source said. 

Scotsman Industries is a commercial ice machine manufacturer. It has six manufacturing facilities and sells to more than 100 countries around the world, with offices in the US, Asia, Europe, the Middle East and Africa.

Warburg Pincus declined to comment.  

Making ice

According to Washington State documents, Fund X, a 2007 vintage, was yielding an internal rate of return of 3.69 percent and a total value multiple of 1.1x as of 30 June 2012. 

Warburg is currently raising its eleventh fund, Warburg Pincus Private Equity XI, which is targeting $12 billion. As at September 2012, the firm had raised $5.8 billion, according to Private Equity International’s in-house database PE Connect.

One of the investors is the Alameda County Employees’ Retirement Association, which committed $50 million in September, PEI reported last month. Other limited partners in the fund include the New Jersey Division of Investment and the Florida State Board of Administration, according to PE Connect.

According to New Jersey Division of Investment documents, the eleventh fund will target venture capital start-ups, later stage growth capital and leveraged buyout investments in the media, telecommunications, consumer and industrial, financial services, life sciences, natural resources, and real estate sectors.