3i makes five times its money in Damcos deal

Europe’s largest quoted private equity group is set to make a return of about 150 percent on the sale of its majority stake in the shipbuilding supplier.

3i, a global private equity company, is set to make 5.2 times its original investment on the sale of its 60 percent stake in Damcos, a global supplier to the shipbuilding industry to Emerson Electric Co, a global technology and manufacturing company.

A source close to the deal said 3i had generated an internal rate of return on the deal of about 150 percent, which valued 100 percent of the shipping company at approximately €162 million.

3i invested in Damcos, previously called Danfoss Marine Systems, in 2004. Danfoss Group, from which 3i purchased a stake in the company from, continued as financial partner holding a 25 percent stake.

Management and staff took the remaining 15 percent.

3i, Danfoss Group and part of the other shareholders will sell their shares amounting to 91.5 percent of the shares in Damcos to Emerson. Damcos’ current management team and staff, including Managing Director Ove Sørensen, will not be affected by the transaction.

Steffen Thomsen, 3i Nordic, said: ”The targets we set for the company upon acquisition have been reached even faster than we initially expected.”

Damcos is a global suppliers of comprehensive management and control systems for marine applications. It produces components and systems for valve actuation and marine tank management for use on ships and in the oil and gas industry. The company’s production facilities are based in Denmark, South Korea and China.