3i to buy Mizuho Investment Management

(Reuters) – British private equity company 3i Group Plc is buying debt management specialist Mizuho Investment Management from one of Japan’s largest banks to boost its presence in the European loans market.

3i said on Monday it would buy Mizuho Investment Management (MIM) from parent company Mizuho Corporate Bank Ltd for an enterprise value of 18.3 million pounds ($28.7 million).

Mizuho Corporate Bank is wholly owned by Mizuho Financial Group, Japan’s second-largest lender by assets.

Europe-focused Mizuho Investment Management has assets under management of 3.7 billion pounds. The company specialises in the management of funds raised to invest in senior and subordinated corporate debt, and provides investment advisory services.

“We’ve now got three platforms for growth – private equity, infrastructure management and debt management,” 3i Chief Executive Michael Queen said on a conference call.

3i shares rose 0.1 percent to 288.4 pence by 0745 GMT, in line with a 0.2 percent rise in Britain’s blue-chip FTSE 100 index .FTSE. The company has a current market capitalisation of around 2.8 billion pounds.

3i said the deal would boost its earnings, and Oriel Securities analyst Iain Scouller said Mizuho Investment Management could bring in a further 15 million to 20 million pounds of income to 3i.

“It looks like quite a good transaction for 3i. Clearly, it gives 3i expertise in a new area,” said Scouller, who has a “buy” rating on 3i shares.

3i said it could make further acquisitions in the debt management sector in the future. CEO Queen said 3i would take on all of Mizuho’s 28 staff and added the company aimed to expand Mizuho Investment Management’s geographic reach.

“We’re looking to raise debt funds primarily in Europe but we do see opportunities in emerging markets,” he said.

UBS, KPMG and law firm Freshfields advised 3i on the Mizuho Investment Management transaction.
(By Sudip Kar-Gupta. Editing by Paul Hoskins and Erica Billingham)