Dunedin Enterprise scoops 180 per cent return on CitySprint venture

Since investing £33.1 million in 2010, the firm has helped CitySprint make 21 acquisitions, creating a nationwide network of 40 service centres and over 3,000 self-employed couriers.

Underlying profits have more than doubled over the same period in Dunedin’s largest investment.

A portion of the proceeds have been rolled over into a newco, ‘New CitySprint’.

The realisation of CitySprint values the company at £175m and generates proceeds of “26.1m for Dunedin Enterprise.

This compares to a valuation at 30 September 2015 of £23.2m.

The proceeds are split between capital of £22.8m and income of £3.3m.

The proceeds represent a return of 2.75 times over five years on the original investment of £9.8m when taking account of income previously received.

A total of £7.3m is being rolled over into New CitySprint in partnership with LDC for an interest of 5 per cent in New CitySprint.

Thus the net cash proceeds received by Dunedin Enterprise amount to £18.8m.

In anticipation of the sale of CitySprint, the board reviewed Dunedin Enterprise’s investment strategy and has concluded, following consultation with major shareholders, that it would be in the interests of shareholders as a whole to conduct a managed wind down of the company.

The board said it intends to seek shareholder approval for the new strategy at the annual general meeting, which will be held in May.

If the proposals are approved by shareholders, the company will continue to meet its current commitments but no new commitments will be made.

Dunedin Buyout Fund III LP still has almost two years left in its investment period.