SLR selects 3i as partner for next phase of international expansion

SLR Holdings (“SLR”, “the Company”) announces an agreement in which 3i will invest £32.5 million for a significant minority stake in the Company.

SLR Holdings (“SLR”, “the Company”), one of the UK’s leading environmental consultancies, today announces an agreement in which 3i will invest £32.5 million for a significant minority stake in the Company, valuing it at approximately £100 million. 3i replaces ISIS Equity Partners as minority shareholders in SLR.

SLR is an international environmental consultancy with offices in the UK, US and Canada. It has particular strengths in the energy sector, with blue-chip customers in both the oil and renewable power sectors, the private sector waste management industry, to which it is the UK’s leading consultant, and the planning and development sector, working for many of the major commercial developers. SLR is an employee controlled consultancy, with over 220 employee shareholders.

For the year ended October 2007, SLR reported revenues of £32.7m (up 36%, year on year) and EBITDA of £6.6m (up 47%, year on year), driven by strong performance across all areas of the business.  The figures reported include the acquisitions of Insite Environments, a UK landscape, architecture and masterplanning firm, and Seacor Environmental, a leading Canadian environmental consultant during the year. Since ISIS’ investment in 2004 employee numbers have risen from 168 to 650.

SLR has an ambitious strategy of complementing organic growth with the selective acquisition of high calibre companies to extend its technical and geographic coverage, with India, Australasia and continental Europe being particular target regions for future expansion.  3i’s investment, together with £29m of debt funding provided by Lloyds TSB Corporate Markets, will provide SLR with significant funds to support its growth strategy.

3i has deep experience in the sector, having successfully supported the growth of ERM which it sold to Bridgepoint for $535m in 2005, and has a strong understanding of consulting businesses with investments including: Foster + Partners, Williams Lea, Coor Service Management, NNC and KNEIP amongst others.  Richard Bishop, Partner, 3i Growth Capital, will join the Board of SLR Holdings.

David Richards, Chief Executive of SLR, commenting on the investment, said:

“As a market leader in a highly attractive market, SLR had received approaches from a number of other sources within the private equity arena, however, in 3i we feel we have found our ideal partner due to a combination of its unique international network, strong sector credentials and clear specialisation in minority investing to help empower our people and support our ambitious growth strategy. We are confident we have the right team for future growth and to bring the company to a successful IPO in the medium term.”

Rupert Bell, 3i Director, commented:

"SLR is a market leading business in a sector with tremendous growth potential. We have known the management well for some time and are delighted to be working in partnership with such an outstanding team. We look forward to leveraging our unique global network and sector expertise to help SLR in the next phase of its growth strategy, to develop its international profile and to grow the business exponentially."

Wol Kolade, Managing Partner, ISIS Equity Partners, added:

“We have worked with SLR to support its impressive organic and acquisitive growth over the last four years.  During that time it has grown to be one of the UK’s leading environmental consultancies with an expanding international presence.  We are delighted to have realised this successful investment which yielded a return of over six times our original investment.  We wish SLR well in its next phase of growth.”

ISIS’s investment was made by Shani Zindel and Liz Jones.  Liz Jones managed the investment and was a Director of SLR Holdings.

PricewaterhouseCoopers  Corporate Finance acted as advisers to 3i and Newco. Due diligence was performed by KPMG Transaction services, CIL and AON. Legal advisers were Travers Smith (3i), Olswang (ISIS), Wragge & Co (management) and Osborne Clarke (banking).