3i announces significant move

RNS Number : 3297T

3i Group PLC

27 September 2010

 



27 September 2010

3i announces significant move in debt management with agreement to acquire MIM

3i Group plc ("3i" or "the Group") today announces that it has reached agreement with Mizuho Corporate Bank, Ltd. ("MHCB") to acquire Mizuho Investment Management (UK) Limited ("MIM"). MIM is one of Europe's leading debt management businesses with assets under management ("AuM") of £3.7 billion.

3i Debt Management Limited ("3i DM"), a wholly owned subsidiary of 3i, has entered into an agreement with MHCB to purchase 100% of the shares in MIM for an enterprise value of £18.3 million, subject to MIM investor consent and 3i obtaining regulatory approval from the UK FSA.

MIM was established by MHCB in 2005 as its 100% owned asset management subsidiary. MIM specialises in the management of funds raised to invest in senior and subordinated corporate debt, providing investment advisory services in return for fees. MIM has a high quality loan portfolio and an established fundraising track record with a diverse investor base. MIM has built a strong team of 28 employees, has raised eight funds, totalling over £4.0 billion, since 2005 and had £3.7 billion AuM at 31 March 2010.

Today's acquisition enhances 3i's capabilities in the debt markets and builds upon the Group's existing private equity and infrastructure businesses. 3i believes that the depth of its network, sector insight and relationships with investors and banks from its existing businesses will add considerable value to MIM.

3i's existing debt management activities will be merged with MIM to form a distinct business line, 3i Debt Management, with a total AuM of c£4.0 billion. Jeremy Ghose, CEO of MIM, will become Managing Partner and CEO of 3i DM and will join 3i's leadership team. Michael Queen, 3i Group CEO, commented:

"Today's acquisition builds upon our debt management capabilities and reinforces our strategy of growing 3i in areas consistent with our investment expertise. MIM is a leading player in the European loan market and is highly complementary to our existing activities. There is an excellent cultural fit with 3i and the expanded business will create an enhanced debt platform to grow profitably into the future."

Acquisition details and regulatory disclosures

3i DM has agreed to buy MIM, subject to regulatory approvals, from MHCB for an enterprise value of £18.3 million.

On completion of the acquisition, MIM management and 3i's existing debt management team will invest in 3i DM to acquire a 45% stake, and 3i will retain the 55% majority interest. 3i and management intend to grow 3i DM through further acquisitions and raising new funds. 3i may acquire, or be required to buy, management's shares. These purchases will take place in instalments over the three financial years to 31 March 2016. Payments under these put and call arrangements will be largely driven by post-acquisition growth of the 3i DM business and will be calculated as a pre agreed multiple of profits achieved in the three financial years to 31 March 2016. In the year to 31 March 2010, MIM generated net profit of £2.7 million and, at 31 March 2010, had gross assets of £37 million.

3i is being advised on the transaction by UBS Investment Bank, Freshfields and KPMG. Management have been advised by Key Capital, Dickson Minto and KPMG.

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For further information, please contact:

Patrick Dunne, 3i Group Communications Director	Tel: [phone]
Philip Gawith, Maitland	Tel: [phone]

About 3i

3i is an international investor focused on Private Equity and Infrastructure and investing in Europe, Asia and North America. Our competitive advantage comes from our international network and the strength and breadth of our business relationships. These underpin the value that we deliver to our portfolio, shareholders and fund investors.

www.3i.com

About Mizuho Investment Management ("MIM")

MIM was established by MHCB in 2005 as its 100% owned asset management subsidiary. MIM specialises in the management of corporate debt funds invested mainly in senior and subordinated loans. MIM has built a strong team of 28 employees and has raised over £4.0 billion since 2005 in eight funds. The senior management team collectively has over 110 years of relevant market experience, including Jeremy Ghose who has been CEO since its establishment and has over 23 years of experience gained at MIM, MHCB and HSBC, and have delivered a strong performance in turbulent markets.

 

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