3i scores 4.1x on Aspen Pumps sale to Inflexion

Katharine Hidalgo
18 December 2019

Tweet
Facebook
LinkedIn
Google plus
Send to

3i Group has received cash proceeds of ТЃ208m from the sale of pumps manufacturer Aspen Pumps to Inflexion Private Equity.

A spokesperson for 3i told Unquote that the deal valued the company at £350-500m.

Including the £52m in proceeds already generated through a refinancing in December 2018, the deal represents a 4.1x return on invested capital and a 34% IRR for 3i. The firm acquired Aspen Pumps from its balance sheet in 2015.

Inflexion made the investment from its Buyout Fund V, which closed on £1.25bn in May 2018. It deploys equity tickets of £10-200m. The fund previously owned Aspen Pumps and sold the company to 3i. A spokesperson for Inflexion told Unquote: "Part of the strategy remains international expansion, and Inflexion opened an office in Boston at the beginning of this year, meaning it is well placed to support those efforts in the US." This is Inflexion's 11th investment in 2019.

During 3i's holding period, Aspen completed six acquisitions in France, Germany, Australia and the UK, though the acquisitions were made from the company's balance sheet and were not supported by 3i.

The transaction is expected to complete in Q1 2020.

Previous funding
In March 2007, Inflexion led the management buyout of Aspen Pumps and BBJ Engineering in a deal valuing the company at £25m. The firm drew equity from its Inflexion 2006 Buyout Fund. The transaction was supported by debt facilities provided by Lloyds TSB Acquisition Finance.

In October 2007, Inflexion supported the acquisition of Orchard Electronic.

In 2015, Inflexion Private Equity sold Aspen Pumps to 3i for £105m, generating a 14x return. Aspen reported EBITDA of £10m in 2014.

3i refinanced the company in December 2018, receiving £52m from the transaction, representing more than 0.8x its original equity investment.

Company
Aspen Pumps designs, manufactures and distributes mini-pumps that remove condensate water from air conditioning and refrigeration systems. Founded in 1992, the group also sells a range of ancillary products for air conditioning installers and engineers.

Aspen Pumps has offices and warehousing in the UK, France, Germany, the US and Australia. The group currently employs 200 people and generated a profit before tax of £12m from revenue of £47m in 2018. This was up from £9m from revenue of £43m in 2017.

People
Inflexion Private Equity – Simon Turner (managing partner).
3i – Pete Wilson (partner, head of UK private equity); Jonny Crane (partner, head of industrials).
Aspen Pumps – Adrian Thompson (CEO).

Advisers
Equity – Alantra (corporate finance); PwC (commercial due diligence, financial due diligence, tax); Jones Day (legal).
Vendor – Robert W Baird (corporate finance); Travers Smith (legal); Deloitte (financial due diligence, tax); LEK (commercial due diligence).