Acquisition of TH Technologieholding GmbH
3i Group PLC
3 February 2000
3i Group plc - Acquisition of TH Technologieholding GmbH
3i Group plc ('3i'), Europe's leading venture capital company, announces that
it has agreed to acquire TH Technologieholding GmbH ('Technologieholding').
The combination of 3i and Technologieholding will create Germany's leading
technology and venture capital investor.
Technologieholding
The Technologieholding group is a specialist venture capital investor focused
on early stage technology investments in Germany and elsewhere in continental
Europe. The group manages and advises venture capital funds in excess of DM
500 million (*153.8 million) including the Strategic European Technologies
N.V. ('SET') fund of NLG 300 million (*81.9 million). At 31 December 1999
funds managed or advised by the Technologieholding group had equity
investments in 109 technology companies. During 1999, 52 new investments and
32 follow-on investments totalling DM 178.3 million (*57.7 million) were made
by the managed funds.
Technologieholding was founded in 1987 by Mr Falk Strascheg and Dr Gert
Kohler. It operates from seven locations in Germany and has 39 employees,
including 24 investment professionals, and access to a strong deal flow of
early stage technology investments. Technologieholding has an excellent
investment record. To date ten of its portfolio companies have obtained a
quotation. These include Intershop Communications, Adcon Telemetry, BROKAT
Infosystems, Poet Software and ricardo.de. Technologieholding's first two
investment funds, raised in 1990 and 1995, achieved compound annual returns of
approximately 57% and 146% respectively from date of inception to 30 June
1999.
The Technologieholding business earns carried interests and management fee
income from the funds it manages and advises. Technologieholding and its
subsidiaries had adjusted negative net assets of DM 4.3 million at 31 December
1999. The value of carried interests is not reflected in Technologieholding's
net asset value. This is because the underlying portfolio is held at the
lower of cost and written down value and the investments are substantially
funded by third party capital. In the year ended 31 December 1999,
Technologieholding and its subsidiaries received management fee income of DM
11.5 million and made a consolidated net loss of DM 2.3 million after tax.
The transaction
3i is acquiring:
- through 3i Deutschland GmbH, a wholly owned subsidiary, the entire issued
share capital of Technologieholding; and
- 80.2% of the 'A' share capital of SET. The 'A' shares are entitled to a
carried interest in the profits made by the SET fund. 3i will make an offer on
similar terms in due course to acquire the remaining 19.8% of the 'A' share
capital.
The consideration payable comprises an initial cash consideration of DM 333.0
million (*102.6 million) payable on completion. Completion is due to take
place later today.
The vendors of Technologieholding have agreed to reinvest DM 166.5 million
(*51.3 million) of the initial cash consideration by subscribing for 4,927,796
new shares of 50p each in 3i which will be issued at a price of *10.42 per
share. The vendors have undertaken to retain these shares for at least two
years.
Further cash payments may be made depending upon the performance of
Technologieholding and the SET fund. Such payments will not be made until 3i
and its subsidiaries have received net carried interest payments totalling DM
100 million (*30.8 million) in the case of Technologieholding and DM 80.2
million (*24.7 million) in the case of the SET fund.
An amount related to the proceeds received in due course from the realisation
of the Technologieholding group's interest in Intershop Communications AG will
be distributed to the vendors.
Continuing arrangements
Dr Gert Kohler is entering into a three-year employment agreement and will be
appointed a Managing Director of 3i Europe plc with responsibility for
developing 3i's continental European early stage technology business. Dr
Kohler will also be appointed to the 3i Group Investment Committee. Mr Falk
Strascheg, the other founder of Technologieholding, will retire later in the
year and meanwhile will provide consultancy services to the combined 3i and
Technologieholding businesses in Germany.
Brian Larcombe, Chief Executive of 3i, commenting on the acquisition said:
'We are delighted to be able to combine 3i and Technologieholding to create
Germany's leading venture capital and technology investment business. We have
known Technologieholding and its founders for some years and it is an
excellent fit with our business and people in Germany. This is a significant
step in expanding our capabilities for investing in technology and in building
our funds under management. We are particularly pleased that Gert Kohler will
be contributing to the development of our technology investing business and
that Falk Strascheg will be working with us until his retirement.'
Falk Strascheg, commenting on the acquisition said:
'We are delighted to become a part of Europe's leading venture capital
company, having admired 3i for some time. There is an excellent fit between
our organisations and we believe that 3i can provide the best platform for the
development of our business.'
For further information, please contact:
Liz Hewitt, Director of Corporate Affairs 0171 928 3131
Andrew Millington, Shandwick International 0171 905 2444
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