3i Group plc, alongside management, has agreed to acquire A&A Manufacturing, a leading manufacturer of engineered, mission critical protective equipment. 3i is investing approximately $110 million. The enterprise value of the transaction, which is subject to customary closing conditions, is $202.5 million.
The announcement comes after a round of successful exits for the firm, which has been taking full advantage of the frothy financing and exit markets.
Headquartered in New Berlin, Wisconsin, A&A’s products are made from a variety of materials ranging from composites to exotic metals. The products are designed to protect and elongate the life of valuable machinery while promoting worker safety by keeping crucial equipment functioning properly. Since its establishment in 1945, A&A has grown to be a market-leading global manufacturer of niche engineered protective and safety equipment, primarily for various industrial applications. The Company has manufacturing operations in North America and Germany and sales throughout the world; it employs 474 staff globally and generated revenues of approximately $91 million in 2013.
3i has invested in similar companies in the sector including MoldMasters, Hilite, Hyva and NORMA. The firm recently exited its investment in Hilite for a return of 2.1x.
In sterling terms, the total proceeds to 3i Group and funds represented a 2.1x money multiple on the original investment of €190 million (£172 million). Proceeds to 3i Group from the transaction were £155 million, representing a 32% uplift against a value of £117m at 31 December 2013 and a 17% uplift against a value of £133 million at 31 March 2014.
The sector represents a favorite investment thesis of the firm, and one that has attracted repeat attention from LPs. 3i is a public company traded in London, one of a handful of private equity firms that have decided to go public themselves in recent years.
“A&A is a great business and we look forward to working with the management team to help accelerate its expansion into international markets.” said Ken Hanau, Managing Partner, 3i North America.
This article was published in Opalesque's Private Equity Strategies our monthly research update on the global private equity landscape including all sectors and market caps.