3i to sell debt management arm

3i Group has agreed the sale of its debt management business to Investcorp.

3i says the transaction will generate cash proceeds of £222 million and an exceptional profit on disposal of £36 million, subject to closing adjustments which are dependent on the transaction’s completion date.

The proceeds will be reinvested in 3i’s private equity and onfrastructure divisions.

The transaction is expected to close by the end of March. 3i’s chief executive, Simon Borrows, said: “Our debt management business has produced strong cash income for the Group since our strategic review in 2012. However, the division fits less well with the 3i of today as we focus on our growing Infrastructure business and a proprietary capital approach in Private Equity.

“We are proud to have built 3iDM into an industry leader in its markets and are delighted with our agreement with Investcorp, which we believe has the strategic commitment, capital and distribution capabilities to support 3iDM in its next phase of growth.”

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