The recent sale of Georgetown, Ontario, manufacturer Mold-Masters Ltd. by 3i Group gave the British private equity firm a multiple of approximately 2.6x on its original investment. 3i, which invested C$166 million in Mold-Masters in 2007, realized its gains on the C$975 million acquisition of the company by Milacron LLC, backed by CCMP Capital Advisors. Luisa Beltran of peHUB has a piece about how the restructuring 3i plans to use its balance sheet for future deal-making in North America and Europe.
3i sells Mold-Masters at 2.6x its investment generating 90% uplift in value
12 February 2013
3i Group plc (“3i”) announces that it has sold Mold-Masters to Milacron for CAD$975m (approximately £615m).
The proceeds of CAD$347m (approximately £219m) represent a 90% uplift over March 2012 opening value of £115m and a 2.1x money multiple on the CAD$166m that 3i has invested, initially in October 2007. In sterling terms, the money multiple is approximately 2.6x. Excluding amounts in escrow, the proceeds are CAD$341m (approximately £216m).
Headquartered in Georgetown, Canada, Mold-Masters is a global leader in melt delivery and control systems. The company designs and manufactures advanced hot runner systems, temperature controllers and auxiliary equipment for the plastic industry.
Since 3i’s initial investment in Mold-Masters in 2007, the company has accelerated its organic growth in Asia, Europe and South America. The company has also made a number of add-on acquisitions to expand its geographical reach and product offering. 3i has supported Mold-Masters through its extensive active partnership approach by improving its salesforce effectiveness and driving operational efficiencies. Between 2009 and 2012, the company substantially grew its market share and grew its turnover from CAD$168 million to CAD$271 million, representing a CAGR of 17%, reinforcing its position as a global leader in melt delivery and control systems.
During the summer of 2012, and working closely with the company and its management, 3i developed a detailed exit plan for its investment in Mold-Masters. Following these preparations, and strong indications of interest from prospective buyers, 3i initiated an auction process in late 2012. It was a highly competitive process, with interest from a wide range of private equity and strategic buyers. On 12 February 2013, 3i entered into a definitive agreement to sell Mold-Masters to Milacron. The transaction is expected to close by April 2013, subject to certain regulatory approvals.
Proceeds to 3i from this transaction are approximately £219m (including amounts in escrow and at current exchange rates), against an opening value at 31 March 2012 of £115m and a value of £158m at 31 December 2012.
Simon Borrows, 3i’s Chief Executive said:
“This transaction is yet further evidence of the strong and measurable progress that we are making against our strategic agenda. Since announcing the new strategy for 3i in June last year, we have wasted no time in implementing the restructuring of 3i and delivering against the immediate priorities and targets that we set out.
As part of this strategy, our Private Equity business has been focused on intensively managing our existing portfolio of investments and seeking realisations where we can maximise proceeds, and in doing so, demonstrate healthy value uplifts to NAV and good cash profits. Strong businesses like Mold-Masters are always in demand and today’s news is an example of what can be achieved from careful planning and a well run auction process underpinned by robust market conditions. This transaction also underlines our progress within Private Equity, the depth of our international network, and the capabilities of our US team.”
We are well progressed with our plans for further realisations within Private Equity and expect to see the benefits of these coming through over the next 18 months.”
Ken Hanau, Managing Partner, 3i North America, said:
“3i is very proud to have contributed to the success of Mold-Masters. Over the last five years, 3i has worked closely with the Mold-Masters management team, supporting the company’s growth in emerging markets, the expansion of its product offering and the diversification of its end-customer base. The company is well positioned for continued future growth as part of Milacron.
Mold-Masters’ global market leadership has been a good fit with 3i’s investment strategy. We will continue to focus on investing in these types of businesses in European and North American markets.”
Note: all sterling amounts are stated as at current exchange rates.
For further information, contact:
Kathryn van der Kroft
Tel: +44 20 7975 3021
Notes to editors:
About 3i Group
3i is a leading international investor focused on mid-market private equity, infrastructure and debt management across Europe, Asia and the Americas.
Mold-Masters Limited is the global leader in melt delivery and control systems. It designs and manufactures the plastic industry’s most advanced hot-runner systems, temperature controllers and auxiliary equipment. Since 1963, Mold-Masters has invested heavily in research and development. With over 900 granted and pending patents, Mold-Masters has created many technology breakthroughs and enabled countless new ways of molding parts with hot-runners. With manufacturing facilities in North America, South America, Europe, India and China, as well as sales and service support in 70 countries, Mold-Masters spans the globe with its capabilities.
About Milacron LLC
Milacron LLC is committed to being the leading plastics processing solutions provider with world-class capabilities across all of its businesses: Milacron (Plastics Machinery), DME (Mold Base Technologies), Aftermarket (Parts and Service) and CIMCOOL® Fluid Technology (Metalworking Fluids and Services). Through its businesses, Milacron offers a broad portfolio of exceptional products and services, providing solutions for customers’ complex plastics needs. The people of Milacron’s companies know what matters in manufacturing, and every day, put this knowhow to work to help customers improve productivity, cut costs, increase energy efficiency, eliminate scrap and reduce cycle times.
For more information, visit the Milacron website at www.milacron.com.
For further information please contact:
Kathryn van der Kroft
tel. +44 207 975 3021
Photo courtesy of Shutterstock.