3i Group has sold its stakes in ten portfolio companies to Cipio Partners, a direct secondaries firm. No financial terms were disclosed for the sale, which involved companies from 3i’s European venture capital portfolio.
Cipio Partners, a leading secondary direct investment firm, and 3i Group Plc, an international leader in private equity, today announced the signing of a definitive agreement for the sale of interests in ten companies currently part of 3i’s European Venture portfolio.
“3i has invested in a number of mature, yet high-growth assets and Cipio is delighted to have been chosen to take over from 3i,” said Roland Dennert, a Partner at Cipio. “Our ability to rapidly execute transactions with large asset pools was certainly part of the solution 3i was seeking, and our favorable track record with both vendors and portfolio companies in past deals made Cipio the partner of choice. We are delighted to bring our combined European and US angles to bear for the portfolio companies.”
The transaction reflects the evolution of the private equity industry and of the secondary direct market, with a growing number of private equity firms exploring alternative liquidity routes for their portfolios. Maximilian Schroeck, a Managing Partner at Cipio in the US, commented: “After starting out with several acquisitions from Fortune 500-type corporations, over the last six to eight quarters Cipio has seen very strong deal-flow from the full range of market participants including banks, private equity firms and corporates in our core markets in Europe, the US and the Middle East. Against the backdrop of the macroeconomic situation, secondary direct market activity is set to increase and we are very well positioned within it.”
Tom S. Anthofer, Managing Partner, concluded: “I am pleased to see us complete yet another European transaction with a blue-chip vendor, which will give other sellers in the region the confidence to take advantage of the secondary direct market for their own liquidity needs. Clearly, as an investment firm we seek to provide our investors access to a well diversified portfolio of transactions and underlying high-quality portfolio companies across a number of geographies, industries and stages. The common theme to all of them is that we combine the upside of venture and growth equity with the much reduced risk and shorter holding periods available in the secondaries market. This purchase from 3i is a prime example of the type of deal we seek to execute our strategy.”
3i Group Plc refocused its strategy away from venture capital to growth capital investment in early 2008. Achim Lederle, 3i Partner , who co-led the transaction, noted: “This sale of 3i’s stakes in these venture capital assets is consistent with 3i’s strategy to realise our legacy venture capital portfolio at strong values and our strategy to invest on profitable fast growing SMEs (growth capital), mid market buyouts and infrastructure opportunities. We are pleased to name Cipio, a reputable secondary fund with good experience in building companies, as the new shareholder who we believe will assist these firms to continue their growth paths in the spirit of the original 3i investment.”
Further details of the companies included in the transaction were not disclosed.
Cipio was advised by Skadden Arps Slate Meagher & Flom as outside counsel. 3i Group was advised by Mummert & Company Corporate Finance and CMS Hasche Sigle.
About Cipio Partners
Cipio Partners is a leading investment management firm in the secondary direct market. Founded in mid-2003, Cipio Partners manages an international portfolio of early and later-stage venture capital and mid-market investments out of offices in Munich, London and San Jose, CA. Further information is available on the Internet at www.cipiopartners.com.
3i is a world leader in private equity. We focus on Buyouts, Growth Capital, Infrastructure and Quoted Private Equity (“QPE”) and invest across Europe, the United States and Asia. Our competitive advantage comes from our international network and the strength and breadth of our business relationships. These underpin the value that we deliver to our portfolio and to our shareholders. http://www.3i.com/