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3i buys IT consultancy for £190m

The UK investment firm has carried out the second AIM take-private this year as European mid-market buyout firms continue investing.

FTSE 100 investment firm 3i has bought Civica for £190 million ($379.2 million; €240.5 million).

The deal is the second AIM take-private by a buyout firm since the beginning of the year.

Last week in the first AIM take-private of the year mid-market firm ECI Partners agreed its £60 million bid for contract research business Premier Research Group.

The agreed 3i bid at £2.70 per share values Civica at a 33.7 percent premium to its closing price yesterday and a 39.8 percent premium to its closing price for the six month period prior to the bid statement.

Civica chief executive Simon Downing and finance director Michael Stoddard took part in the management buyout and so they did not take part in the board’s deliberations of the offer.

Civica provides software consultancy across the UK and internationally.

3i has 41.48 percent acceptance from shareholders in Civica as well as a non-binding letter of intent to accept the offer for a further 5.24 percent of its issued share capital. 3i had received acceptance from major shareholders financial services firm Axa and asset managers Laxey Partners, BlackRock and Jupiter Asset Management.

It needs acceptance from 90 percent of shareholders to complete the deal.

Paul Lewington, a director at Close Brothers Corporate Finance, financial advisor to Civica, said in a statement Civica’s success in consolidating a fragmented market had not been reflected in its share price performance and like many mid cap software stocks the public market had become a challenging place to raise capital.

3i has continued investing at a broadly continuous pace across its business this year. The investment firm’s mid-market buyout business has invested £823 million in the eleven months to 29 February or slightly more than a third of the £2.15 billion it has invested across its business. Unlike its larger buyout peers much of this investment has come in the past six months as financing continues to hold strong for the European mid-market despite the credit crunch.