3i makes a 2.9x return on the sale of LHi Technology
3i Group plc (“3i”), and funds managed by 3i, today announce the sale of LHi Technology (“LHi” or “the Company”), the Asia-headquartered designer, manufacturer and provider of cables and related components to the medical equipment and device industry, to Carlisle Companies Inc, the global diversified US conglomerate. The enterprise value of the transaction is approximately $195 million.
In sterling terms, the total proceeds to 3i Group, including income received to date and amounts to be held in escrow upon completion, is expected to result in a c.2.9x money multiple on its original investment of £16 million. Proceeds to 3i Group from today’s transaction, excluding amounts held in escrow, will be c.£39 million representing a 18% uplift against a value of £33m at 31 March 2014.
LHi was founded by Jay Pok, a pioneer in the development of medical cable product manufacturing within China. During our investment, we supported LHi’s evolution from a business focused predominantly on patient monitoring into one offering more technically demanding and higher performance products, including cables for surgical and video endoscopy applications. Today LHi supplies complex products, which are used in challenging environments to provide real time information for patients, and is one of only a handful of players with this capability in the world.
We also supported the leadership transition of the business as Scott Hayden took on the role of CEO, supported by Alberto Bautista who we introduced as Chairman and who brought over 25 years industry experience from Baxter International, a leading global medical supply and services company. Working in partnership with the management team, we implemented several operational improvements during our investment, including increasing the company’s technical capabilities and optimising key costs.
LHi has grown strongly over the past six years with EBITDA almost doubling and revenues tripling from $31m to in excess of $100m. LHi now employs more than 2,000 people in China and has offices in Hong Kong, the US, Germany and Malaysia. In June 2012, the company was awarded the GE Innovation award for its outstanding performance in quality, delivery and cost reduction.
John Thomson, 3i Partner, commented:
“We are proud to have supported LHi over the past six years, during which the Company significantly expanded its product range, took advantage of increased medical outsourcing and tripled its revenues. We believe Carlisle will give LHi the opportunity to build upon the success it has achieved to date.”
Scott Hayden, CEO of LHi Technology, commented:
“It’s been a great opportunity to lead LHi, in partnership with 3i, as it has grown from strength to strength. I look forward to working with Carlisle on the next stage of our future and to benefitting from their experience to further strengthen our market leading position.”
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For further information, contact:
3i Group plc
Kathryn van der Kroft
Tel: +44 20 7975 3021
Email: kathryn.vanderkroft@3i.com
Latika Shah
Tel: +44 20 7975 3157
Email: latika.shah@3i.com
Notes to editors:
All sterling amounts are stated as at current exchange rates except historical book values which are stated at the prevalent exchange rate at the time.
About 3i Group
3i is a leading international investment manager focused on mid-market private equity, infrastructure and debt management across Europe, Asia and North America. For further information, please visit: www.3i.com.
About LHi Technology
LHi Technology is a medical cables manufacturer, fully dedicated to the manufacturing of OEM medical cable interconnects and assemblies.
Our proven strategy of offering our customers competitive solutions without compromising on quality and reliability has truly made us the Leading Healthcare Interconnects company. For more information, visit: www.lhitechnology.com.
Regulatory information
This transaction involved a recommendation of 3i Investments plc, advised by 3i Singapore.