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3i Said to Plan $1.4 Billion Sale, IPO of Finnish Eltel

Private-equity firm 3i Group Plc (III) is planning a sale or initial public offering of its Finnish telecommunication business Eltel Networks that may value it at about 1 billion euros ($1.4 billion), said two people with knowledge of the matter.

Morgan Stanley and BNP Paribas SA (BNP) are advising on the sale and no final decision has been made, the people said, asking not to be named as the details aren’t public. The valuation of the business includes debt, they said.

Private-equity owners are lining up to sell stakes acquired over the last few years as deal-making volumes return to pre-crisis levels for both mergers and equity capital markets in Europe, according to data compiled by Bloomberg.

Funds managed by 3i hold 59.5 percent of Eltel, while BNP Paribas holds 29.5 percent and management holds 11 percent. The Espoo, Finland-based company builds and maintains electricity, telecommunications, railway, aviation, public safety and enterprise networks and is the leading provider of infranet services in northern Europe, according to 3i.

Eltel, which 3i acquired in 2007, reported revenues of 1.2 billion euros last year, a 0.4 percent rise over 2012, and earnings before interest, taxes and amortization of 52.4 million euros including one-time exceptional items. The company has about 8,500 employees, according to its website.

Representatives for 3i, Eltel and Morgan Stanley (MS) declined to comment. BNP couldn’t be immediately reached for comment outside of regular business hours.

To contact the reporters on this story: Ruth David in London at rdavid9@bloomberg.net; Kiel Porter in London at kporter17@bloomberg.net

To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net Elizabeth Fournier

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