3i sells Refresco to Icelandic consortium

3i, Europe's leading private equity company, has sold its stake in Refresco to an Icelandic consortium consisting of Kaupthing Bank, FL Group and Vifilfell Bottling Group for €463m. The deal generated a €116m profit, a 50% IRR and a 3x money multiple for 3i over a two and a half year period.

Refresco is one of Europe''s leading suppliers of private label soft drinks  and fruit juice to food retailers and is the market leader in Holland and Germany, with a major presence in France and Spain.

Menno Antal, Managing Director 3i Benelux said: "During our investment we proactively developed the operational side of the business, introduced a highly experienced chairman to the board and used our network and portfolio to help the company target opportunities in both Western and Eastern Europe."

Frans Barèl, CEO, Refresco said: "We chose 3i because we were convinced it would support our aggressive buy and build strategy.  That has proven to be the case.  It has been a highly successful partnership."

3i was able to beat off stiff competition to win the deal because of its strong European food and drink sector expertise and the breadth of its network.  3i put together a team of Dutch and UK investors, supported by 3i food and drink sector specialist Keith Ellis.

Refresco was an attractive business for 3i.  At the time of the deal, European consumption of private label fruit juices and drinks was growing by 4-6% per annum and the leading players were expanding through acquisition.  Furthermore, the quality of Refresco''s management team also impressed 3i.

Shortly after investing, 3i introduced Alan Peterson to the board as chairman.  A former CEO of Meyer International PLC, Alan acted as a mentor to the management team and played an active role in driving the integration of the previously autonomously run group companies into one single European business.  Alan also introduced improved controls, systems and budgeting processes and added breadth to the operational management systems as well as improved corporate governance in the boardroom.

3i supported Refresco''s buy and build strategy throughout the investment.  With the help of 3i''s team in Finland, Refresco acquired Finish private label market leader VIP Juice for €22.5m in 2005.  This purchase enabled Refresco to enter the Russian market and provided access to the Russian and Nordic regions.  3i also supported Refresco''s acquisition of Interfruit, a leading Spanish national juice business, leveraging the 3i Spanish office and network to analyse the company''s local positioning and relationships.

During the two and half years of 3i''s ownership, Refresco increased its EBITDA by 42%, leveraged its gross margins on products from 8% to 12% and enjoyed organic growth of 10% per annum.  Refresco reported EBITDA of €64m for 2005, 20% above its original plan.