3i agrees to sell Local Press to Johnston Press for £65m

16 Sep 2005

3i, Europe's leading private equity and venture capital company, today announces that it has entered into an agreement to sell Local Press Ltd ("Local Press"), owner of the Belfast News Letter and Derry Journal, to Johnston Press plc in a £65m deal.  3i will receive proceeds of £40m which represents a money multiple of 1.7x and an IRR of 39% on its original investment. The deal is conditional upon the approval of the Irish Competition Authority.

3i completed the MBO of Local Press from the Trinity Mirror Group in January 2004 and has been an active partner with the company over the past 20 months.  In addition to providing funding, 3i introduced experienced chairman Alan Cornish, appointed Ken Beaty as non-executive director and together with management, led by Jean Long, implemented an extensive profit improvement programme.  Since 2004, the business has performed strongly with increased operating efficiencies, growth in circulation, new title launches, increased advertising revenues and additional contract print revenues.

Ken Beaty, 3i Director, commented: "3i invests in talented, ambitious management and works in partnership with them to build value.  At Local Press we have increased profits by over 50% in 18 months.  The newspaper industry is rapidly consolidating around a small number of large players and we believe this acquisition offers great opportunity for both Local Press and Johnston Press."

Alan Cornish, Chairman Local Press, commented: "3i has been a valued partner over the last 20 months and has given us strong support to develop the business.  The timing of this sale to Johnston Press is right for both businesses and will create a major force in the regional newspaper sector in Northern Ireland."

3i and the Local press Shareholders were advised by:
Eric Lawson Smith and Toby Ramsden of Longacre Partners, London
Keith Anderson and Keith Dinsmore of Dickson Minto Solicitors, Edinburgh

Notes to editors

About 3i 
3i is a world leader in private equity and venture capital. We focus on Buyouts, Growth Capital and Venture Capital and invest across Europe, in the United States and in Asia Pacific. Our competitive advantage comes from our international network and the strength and breadth of our relationships in business. These underpin the value that we deliver to our portfolio and to our shareholders.

In the year to March 31, 2005, 3i invested £962m, including co-investment funds.  3i's Buyouts business operates primarily on a pan European basis, investing in businesses with a transaction value of up to €1 billion.  In the year to March 31, 2005, Buyouts invested £532m.  During the same period, its Growth Capital business, which focuses on high growth companies expanding organically or through acquisition, invested £274m across Europe and Asia.  3i's Venture Capital business invested £144m in the year to March 31, 2005.  The venture capital business invests in early stage technology companies throughout Europe and US.

3i Buyout Business
The 3i European Buyout Business is a leader in the European mid-market. 3i lead mid-market buyouts up to €1bn using insight from local knowledge, international connections, and sector teams. Managing over €3.5bn invested in over 100 companies across Europe, the business invests in all sectors, with a particular focus on media, healthcare and business support services. Recent investments include NCP - UK - £550m - parking services and traffic management, Keolis - France - €540m - passenger transport, Betapharm - Germany - €300m - pharmaceuticals. Recent successful exits include Westminster Healthcare - UK - €751m, Travelex - UK - foreign exchange services - £1bn, YBR Group - directories - €1.8bn.