3i realises its investment in Morgan McKinley
3i, Europe's leading private equity and venture capital company, today announces that Morgan McKinley, a market leading recruitment business of which 3i is the largest shareholder, is being sold to Imprint Search & Selection plc ("Imprint"), an AIM listed multi-sector recruitment business, in a deal worth £24m.
The exit will result in initial capital proceeds of £9.2m for 3i, with up to a further £1m of deferred consideration payable over the following year, depending on certain conditions. 3i's money multiple on the investment will be 2.5 times and the IRR is approximately 38%.
3i completed a £3.4m growth capital investment in Morgan McKinley in April 2002, taking a 30% stake. A further investment of £340,000 was made in December 2003, as 3i continued to support the business through the trough of the recruitment and investment banking cycles, backing a team led by executive chairman Ken Brotherston.
This support was based on a belief in the underlying quality of the Morgan McKinley franchise and the opportunity for strong recovery as the cycle turned. The business is now one of the top 3 players in this market and has grown strongly over the last year, justifying the investment strategy. Preferred supplier agreements with core clients have doubled over this period and both permanent and temporary business has thrived.
Morgan McKinley will complement Imprint's existing search and selection businesses (Imprint, ECHM and Wood Hamill), deliver critical mass for them in the temp market and strengthen their management team with the appointment of Robert Thesiger, Morgan McKinley MD, who will join the Imprint board.
Justin Maltz, 3i Investment Director, commented: "Morgan McKinley is a high quality business in a growing, but cyclical market. Our support for the business has been vindicated by the performance of Ken Brotherston and his team in growing Morgan McKinley to a market-leading position in its sector. This is another successful growth capital deal for 3i, supporting value growth through a minority investment and backing a strong chairman and team in an interesting market."
Ken Brotherston, chairman of Morgan McKinley, commented: "3i has been a valued partner over the last two years. They have been very a supportive investor helping us grow and develop our business. We are pleased to have delivered an excellent return for them."
The 3i deal team was led by Justin Maltz, investment director. Morgan McKinley received corporate finance advice from Adrian Hadden of R W Baird and legal advice was provided by Simon Fielder at Osborne & Clark.
Notes to editors
3i is a world leader in private equity and venture capital. It focuses on Buyouts, Growth Capital and Venture Capital and invests across Europe, in the United States and in Asia Pacific. Its competitive advantage comes from its international network and the strength and breadth of its relationships in business. These underpin the value that it delivers to its portfolio and to our shareholders.
In the 6 months to 30 September 2004, 3i invested £521 million, including co-investment funds. 3i's buyout business concentrates on the mid and smaller buyout markets in Europe and Asia Pacific and invested £305m in the 6 months to 30 September 2004. Its growth capital business invested £142 million in the 6 months to 30 September 2004 in high growth companies expanding organically or through acquisition. 3i's venture capital business invested £74m in the 6 months to 30 September 2004 in early stage technology companies.
About Morgan McKinley
Morgan McKinley is the leading specialist in banking and financial services recruitment in the UK. As a full service recruitment provider, Morgan McKinley offers a diverse range of solutions tailored to each client's individual requirements. Morgan McKinley is the preferred supplier for over 170 financial institutions in the City. Services include Contingency & Retained, Temporary & Permanent and Campaign Recruitment in the following areas:
Alternative Investment, Accountancy and Banking Finance, Banking Operations, Commodities, Credit, Global Custody, Investment Administration, Investment Banking and Capital Markets, Investment Management, Legal and Compliance, Private Wealth Management, Risk Management and Quantitative Analysis, Secretarial and Support.
Morgan McKinley's business is built on integrity, reliability, quality, specialist knowledge, passion and pioneering spirit. Consultants are dedicated to achieving excellence and raising clients' and candidates' expectations of service levels.