3i and minority shareholders sell Damcos for 162 million

31 Oct 2006

3i, Europe's leading private equity company, today announces that 3i, and funds managed by 3i, have signed an agreement  to sell its 60% stake in Damcos, a global supplier to the shipbuilding industry to Emerson Electric Co (NYSE:EMR), a global technology and manufacturing company. The transaction value for 100% of the company is approximately €162 million.

Damcos is one of the world's leading suppliers of comprehensive management and control solutions for marine applications. It produces components and systems for valve actuation and marine tank management for use on ships and in the oil and gas industry. The company's production facilities are based in Denmark, South Korea and China.

3i invested in Damcos (previously called Danfoss Marine Systems) in 2004, for a 60% stake in the company. Danfoss Group, from which 3i purchased a stake in the company from, continued as financial partner holding a 25 % stake. Management and staff took, as suggested by 3i, the remaining 15 %. 3i, Danfoss Group and part of the other shareholders will sell their shares amounting to 91.5% of the shares in Damcos to Emerson. Damcos' current management team and staff, including Managing Director Ove Sørensen, will not be affected by the transaction.

Steffen Thomsen, 3i Nordic, said: "The targets we set for the company upon acquisition have been reached even faster than we initially expected."

"Based on Danish know-how and strong brand Damcos has established production in South Korea and China at the right time and has thus managed to reduce costs and position itself centrally in the worlds biggest ship building region. The company's turnover has grown by 50% since 2003 and its order backlog now extends into 2009.  Growth rate has doubled over 3i's investment period and Damcos is now ready to take the next step in its development with a big strategic partner," continues Steffen Thomsen.

Ove Sørensen, Managing Director, Damcos, comments: "With 3i's support we have been able to invest heavily in production in the shipbuilding market in China and simultaneously grow both in turnover and profitability. We've been impressed by 3i's global network, in particular its strong presence in Asia and international pool of board members. These elements have been instrumental for Damcos's growth. We have a very strong company that is now ready to grow further with a new owner."

Lehman Brothers acted as financial advisor to Damcos' shareholders.

Notes to editors

About 3i 
3i is a world leader in private equity and venture capital. We focus on buyouts, growth capital, venture capital and infrastructure and invest across Europe, in the United States and in Asia.  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. www.3i.com

About Damcos
Damcos (www.damcos.com) produces components and systems for valve actuation and tank management for use in ships. It operates globally, the biggest markets being South Korea, China and Europe. The company has its own sales and production subsidiaries in these markets.  Production is based in Denmark and South Korea and since 2005 also from China. The company's head office is based in Næstved, Denmark.