3i makes 4.9x its money on Azzurri

3i, Europe's leading private equity and venture capital company, and funds managed by 3i, announce today it has sold its 75% stake in Azzurri Communications, the leading UK converged voice and data communications company, to a secondary buyout vehicle backed by Prudential Ventures (PPM) in a deal valuing the company at £182.5m. 3i's proceeds from the sale of £115m represent an IRR of 38% and a money multiple of 4.9X initial investment.

Azzurri Communications was formed in June 2000, when 3i and funds managed by 3i invested £25m for a majority stake in the company. Working closely alongside the management team, 3i helped the company achieve its first phase of development involving the 15 strategic acquisitions which make up the business today. Headquartered in Newbury, Azzurri currently has sales and support operations in Fareham, High Wycombe, Kingston, Birmingham, Burnley, Hull, Leeds and East Kilbride. 

3i introduced experienced private equity Chairman Alan Cornish to the management team in 2002. Previously he was Deputy Chairman of another successful 3i investment, the market research company MORI, has been Chairman of 3i backed Local Press and was NXD of TeleCity plc. 

Commenting on Azzurri and 3i, Cornish said:  "Azzurri has been a classic private equity deal - a great management team, good market opportunity and a real focus on building value for shareholders."

Partnering with leading manufacturers and networks, Azzurri provides converged voice and data, fixed and mobile communications solutions. Azzurri also provides consultancy services such as in-depth communications audits for large corporations and comprehensive telecoms management services.

Julian Davison, a Partner in 3i''s European Buyouts business said: "We have worked closely with Martin St. Quinton and the Azzurri management team over the past 6 years to help them acquire businesses which would in turn create a platform capable of generating strong organic growth. They are now the leading converged voice and data communications provider in the UK and we''re delighted to hand over the baton to PPM to help take Azzurri into the next logical phase of its development".

Martin St. Quinton, Azzurri Chief Executive said: "We have always felt that Azzurri has a very exciting future and we looked at a number of strategic options to deliver the next stage of our development. We have been very impressed with PPM''s enthusiasm and commitment to working in partnership with us to continue to grow the Company both organically and through acquisition. I would like to take this opportunity to thank 3i who has been a loyal and supportive shareholder throughout and integral to the success we have achieved so far".

3i and Azzurri were advised by Citigroup. Azzurri''s legal advisers were Osborne Clarke, with accounting and tax advice provided by Ernst & Young.