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3i sells NCP car parks to Macquarie

As expected, UK-listed buyout group 3i has sold UK car park operator NCP to Macquarie for £790m, realising a substantial profit just a year and a half after buying the company.

3i has made a partial exit from NCP, the parking services group it bought just 20 months ago, after selling the car park operations to Australian bank Macquarie for £790 million (€1.15 billion; $1.53 billion).

The car park operation has been sold to Macquarie’s European Infrastructure Fund II. This kind of business is attractive to infrastructure investors because of its stable, predictable long-term revenues.

3i will retain control of NCP’s outsourced services division, the UK’s market leader in outsourced parking services – mostly “on-street parking enforcement”, as the company calls it. The division, which also includes NCP’s bus and coach operations, debt recovery unit and an urban design consultancy, has a number of large public sector clients, including London’s Westminster City Council. In total, it employs nearly 4000 people and has a turnover of £140 million.

3i bought NCP for £555 million in July 2005 from rival buyout firm Cinven, and the company has since continued its rapid growth.

News that 3i was in exclusive negotiations to sell the business to Macquarie attracted the ire of the GMB trade union, which accused the buyout group of asset-stripping and not allowing its employees proper union representation. The union staged a protest on behalf of its members at a recent awards ceremony for the industry, at which NCP was awarded a prize for best-in-class training.

3i’s announcement of the transaction betrayed some sensitivity about this negative attention. The buyout group positioned the deal as a de-merger rather than a sale, and stressed the 18 percent growth in NCP’s workforce during its period of ownership.

Chris Williams, the 3i partner who led the deal, said the ‘quick-flip’ had not been intentional. “We hadn’t planned to make any partial realisation at this stage, but with a business well ahead of its milestones, and strategically attractive to others, the board of NCP decided that Macquarie’s offer provided the right solution for developing both of the businesses further”.

NCP chief executive Bob Macnaughton, who becomes chairman of NCP Services, said the move would “enable the two companies to better concentrate on their core skills.”