Apax hopes for repeat performance

3i achieved an IRR of just under 100 per cent on its investment in Thomson Directories, sold for GBP220 million this August to an Apax-led secondary buyout (see page 20). The sale, which realised nearly GBP100 million, represents 3i’s largest cash realisation of the past decade.

3i led the GBP80 million buyout of Thomson Directories from US West in June 1997, investing GBP25 million of equity itself and syndicating slightly under GBP10 million to Advent International. In the two years following the buyout, Thomson Directories has increased its turnover by some 25 per cent and significantly boosted its profitability thanks to a radical cost-cutting exercise.

Cressida Hogg, who together with Ian Nolan handled 3i’s original investment, paid tribute to the Thomson Directories management team, saying that the company had exceeded budget on every count.

3i is reinvesting GBP10 million for an 11 per cent stake in the Apax acquisition vehicle, TDL Infomedia. Hogg says the reinvestment, made on a very different business proposition from our original investment’, acknow-ledges the significant upside potential that remains in the business as it expands into the Internet market.