3i increases its stake in AES Engineering Limited to 40%, valuing the business at £100m

08 Oct 2007

3i today announces it has made a further investment in AES Engineering Ltd. (“AES”), the holding company of the AESSEAL Group, which is a world leader in the mechanical sealing industry.  3i first invested in AES in 1996.  This secondary investment increases its equity stake to 40% and values the business at £100m.  Founder and CEO Chris Rea will retain a majority interest and control of the business. 

The new funding will allow AES to continue its impressive growth and consider acquisition opportunities worldwide.

AES was founded in 1979 by Chris Rea.  Over the last 25 years, the business has achieved an unbroken track record of turnover and profit growth.

Coinciding with 3i’s increased investment, Hamdi Conger, previously non-executive director will become chairman of AES.  The Rt Hon William Hague MP remains as non-executive director of AES and Richard Bishop of 3i will also join the board as a non-executive director.  Neil MacDonald, who was previously the Finance Director at the international engineering group Firth Rixson, has joined as Finance Director. 

Gordon Hague of 3i, commented: "AES is a world class business with a fantastic track record of profitable growth, an entrepreneurial leader supported by a strong team, and international growth prospects.  I'm delighted that 3i is able to provide significant further investment to help the company achieve its growth potential."

Chris Rea commented: "3i has been a fantastic partner, so the Board of AES is extremely happy that they will help us with the next stage of our development and on a personal level I am pleased to say that the due diligence process was much less painful than training for a marathon!” 
  
 3i was advised by Yunus Seedat of Addleshaw Goddard, Leeds and due diligence support was provided by PriceWaterhouseCoopers.  Management was advised by Deloitte Corporate Finance and by Kevin Cunningham of Irwin Mitchell. 

Martin Jenkins, Corporate Finance Partner at Deloitte said: “AES has developed from a start-up 25 years ago to a business operating from over 60 sites in 30 countries and is now the 4th largest mechanical seals company in the world with exports to 83 countries.  This transaction builds on an already successful partnership.”

Notes to editors

About 3i
3i is a world leader in private equity and venture capital.  We focus on Buyouts, Growth Capital, Venture Capital, Infrastructure and Quoted Private Equity and invest across Europe, the United States and Asia.  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 and to our shareholders.

About 3i Growth Capital   
3i Growth Capital is the world’s largest growth capital fund investing over €1bn every year in businesses across Europe, Asia and the US.  We provide financial and strategic support to established businesses with the potential for outstanding value growth.  We invest between €10m - €250m to help businesses achieve their growth ambitions, restructure shareholdings, release equity or change the balance of equity to debt.  Once we have invested, we are committed to working in partnership with majority shareholders.

Recent investments include Groupe Cair, €35m, France; KNEIP, €37m, Luxembourg; Delta Hydrocarbons, €185m, Benelux; UFO Moviez, India, €17m; Electrawinds, Benelux, €30m; DNA, Finland, €140m, €18m; ACR, Singapore, €150m; Fulcrum, US, €40m; Giraffe, UK, €15m; Sten, Spain, €100m and Advanced Power, Switzerland, €31m. 

Recent realisations include SeLoger.com, France, €350m; Alimak Hek, Sweden, €238m; Salamander Energy, UK, €307m; CH4 Energy, UK, €224m; Magix, Germany, €207m; Williams Lea, UK, €165m; and Hayley Conference Centres, UK, €510m.

For further information please contact:

Kathryn van der Kroft
email. kathryn.vanderkroft@3i.com
tel.  +44 207 975 3021