The €445m deal will see the baby care division, which trades under the brand name 'Avent', sold to Charterhouse Capital Partners.
Cannon Avent supplies baby bottles, breast pumps, sterilisers and skin care products to customers in over 60 countries around the world. It is the number one player in the UK and the third largest supplier of baby feeding products in the USA.
A platform to take risks
3i originally invested €7.5m of growth capital in Cannon Avent in 1995 in exchange for a minority stake. Edward Atkin, Managing Director, Cannon Avent, said: "I first got acquainted with 3i in 1989 when I was buying my brother out of the business. Although I was able to do that without private equity, I was struck by 3i's professionalism and established an excellent rapport with them. So when it came to raising growth capital in 1996 they were the natural choice."
3i was keen to invest in Cannon Avent because it had a high quality management team with clear ideas how to grow the business.
Most companies seeking funds from 3i want to tap into its sector knowledge and ability to provide funding throughout the lifetime of an investment. In Cannon Avent's case, however, the company simply required capital to allow it to reach its full potential.
Growing the business aggressively
Edward Atkin, said: "3i has been a valued partner over the last ten years and has played an instrumental role in helping the company develop into the global player it is today."
The 3i investment enabled Cannon Avent to reduce its gearing and focus its attention on growing the business aggressively overseas. Cannon Avent now has a major share in the US reusable feeding market and has invested tens of millions of pounds in manufacturing facilities to produce high volumes of top quality products.
Aside from investing in the business, 3i helped to appoint a non-executive director, Barry Jones. Jones stayed with the company right through to exit and assisted Atkin with his manufacturing plans. He also acted as a mentor to the company's senior executives.
A great result for all parties
The deal is a great result for the Atkin family and 3i. 3i will receive proceeds of €95m (13 times its investment), and an IRR of 35%.
Bill Anthony, 3i Director, said: "Cannon Avent has been a terrific investment for 3i's growth capital business. We have a very high regard for Edward and Celia who have grown the company from a small family business to one of the world's leading providers of baby care products today. We have decided to exit along with Edward and Celia and believe that Charterhouse is well placed to take the business to the next level of growth."