3i makes 3x money on UK engineering exit

London-listed investor 3i has generated £22m in proceeds on its 1994 investment in engineering company Tensar through a sale to Arcapita-owned US business Tensar Corporation.

Global private equity firm 3i has sold its minority stake in engineering business Tensar International to US-based Tensar Corporation, a company set up to distribute the UK-based firm’s technology, in a £68 million (€100 million; $128 million) deal.

3i backed the 1994 management buyout of Tensar, investing £7.2 million alongside UK-based private equity firm Electra Partners.

3i said that the transaction has generated proceeds of £22 million, representing a 3x money multiple on its original investment. 3i declined to comment on the size of the stake it sold in the current transaction.

Ian Brown, 3i investment director, told PEO that putting the two companies together was the next logical step in the company’s expansion. “Tensar International in UK developed this technology and brand, a product that they then licensed to a company in the US, which took the Tensar Corporation name and manufacture it over there,” he said. “It is now the most natural step to put those two companies together.”

Founded in Blackburn in 1952, Tensar manufactures a range of plastic geogrids aimed at the international civil engineering markets such as roads, railways, runways and embankments. The company currently has direct sales operations in the UK, Germany, Scandinavia, China and Indonesia.

During its period of ownership, 3i appointed two new non-executive directors and a chairman to Tensar’s management team and backed the acquisition of a Chinese manufacturer of geogrids for the Chinese market.

Last November, Bahrain-based Arcapita Bank acquired The Tensar Corporation, a US provider of engineered, technology-driven construction site solutions in North America, in a $405 million (€315.5 million) transaction.