3i sells HTC Sweden to Polaris Private Equity

The sale generates proceeds of around £12m for 3i, representing a 119% uplift on the investment's value of £6m as of March 2012.

The deal gives the company an enterprise value of less than €40m and reduces the company's existing debt to zero.

Polaris acquired the company in a deal that saw 3i exit the firm alongside the company's founders, who held 60% of shares, and the former management, who held the balance. The management team has reinvested to secure a stake of 3-5%.

Polaris committed capital from Polaris III, which closed on €365m in 2009. 

The buyer will pursue an organic and acquisitive growth strategy for the company, which will seek to consolidate its position in Europe and the US. The firm will also look to extend its offering in China and Brazil.

"This is a great platform investment for us," Polaris partner Peter Ankerst told unquote". "The company is the global leader for diamond-based grinding systems and has a very strong position in the machines and tools market," he said. "We will pursue consolidation and acquisitions on the machines and tools side, primarily looking at international companies with headquarters in Sweden."

Previous funding
3i first backed HTC in 2006. The deal included a capital injection of around SEK 100m, and the purchase of shares from existing shareholders. The transaction originated via an auction process and was completed in a couple of months.

Under 3i's ownership, HTC Sweden established subsidiaries in Germany, France and the UK, and expanded the company's presence in Sweden and the US.

Company
Headquartered in Söderköping, HTC was founded in 1987. The company produces and sells diamond-based grinding systems for professional flooring in industrial, commercial and public buildings. The firm's product range also includes grinding and polishing machines and tools and dust extractors.

The company's revenues reached SEK 370m with EBITDA of SEK 55m in 2012. At the time of 3i's original investment, the firm recorded turnover of around SEK 200m. The company currently employs 170 members of staff selling its products in more than 60 countries.

People
Tomas Ekman is a partner at 3i and managing director for the Nordic region. Peter Ankerst is a partner at Polaris.

Advisers
Equity – Cederquist (Legal); KPMG (Financial due diligence).
Vendor – Mannheimer Swartling (Legal); ABG Sundal Collier (Corporate finance).

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• Topics
• Nordics
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• Polaris Private Equity