Investcorp to buy 3i’s debt management business

Manama : The Bahrain-based private equity firm Investcorp has agreed to acquire the debt management business of the UK based 3i Group PLC, it was announced yesterday. 

The proposed transaction, for a total consideration of $271 million, will be fully funded through the firm’s existing balance sheet, and will not require any incremental debt financing or equity capital.

The purchase adds $12 billion of assets under management to the company, bringing the total to approximately $23bn. The deal, which is also the largest ever strategic acquisition made by the company, is expected to close in the first half of 2017, Investcorp said.  

Investcorp currently enjoys a regulatory capital adequacy ratio in excess of 30 per cent and accessible liquidity of close to $1 billion at the end of June 2016.

Commenting on the deal, Mohammed Mahfoodh Al Ardhi, Executive Chairman of Investcorp, said, “The combination brings with it some of the most talented credit investment professionals in the industry together with a large universe of private and institutional clients spanning Europe, Asia, the US and the Arabian Gulf.”

Following the acquisition, all 50 of 3iDM’s team, a leading global credit investment company will remain intact. Jeremy Ghose will continue as CEO of the overall business and John Fraser would oversee the US operations.

Rishi Kapoor, Co-CEO of Investcorp, added, “Under 3i’s ownership, the 3iDM team has created a compelling alternative credit investment business which has seen assets under management more than double in the past five years.  We see this business as one of the central pillars of Investcorp’s product platform going forward and are absolutely committed to continuing to grow the business on multiple fronts including fundraising, product development and capital support.” 

Simon Borrows, Chief Executive of 3i, said, “The combination provides 3iDM with access to new and incremental sources of capital through Investcorp’s client base in the Gulf and the US. The fit is excellent from a cultural, product and geographical perspective.”