3i reaps 1.8x on Foster + Partners sale

Ellie Pullen
01 July 2014

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3i has sold its minority stake in London-based architectural firm Foster + Partners, generating a return of 1.8x its original investment.

The management buy-back sees Foster + Partners gaining control of 100% of the company, with all partners becoming shareholders. This brings the number of shareholders in the business from 80 to all 140 partners.

3i has received cash proceeds of £70m, but has reaped an aggregate amount of £108m through the addition of loan repayments received to date.

Furthermore, the firm will receive a deferred consideration of £40m, bringing the total amount to almost £150m – a 1.8x return on investment.

3i acquired its stake in Foster + Partners in May 2007, picking up a 40% stake in the business. At the time, the deal was believed to have valued the company in the region of £400m, according to unquote" data.

Since 3i's investment, Foster + Partners has expanded internationally and doubled its sales in the US, a market that now accounts for 27% of billings. Activity in Asia has also tripled, with billings increasing from 8% in 2007 to 27%.

Company
Founded in 1967, Foster + Partners is headquartered in London with 14 additional offices worldwide. The company employs 1,086 staff and generated turnover of £152.7m for the year ending April 2013, as well as an operating loss of £101.6m.

Foster + Partners is an architecture and design practice. Its most well-known buildings include The Gherkin (30 St Mary Axe) in London, the Great Court in London's British Museum and the Millau Viaduct in France.

People
Lord Norman Foster is the founder and chairman of Foster + Partners. Alan Giddins is a managing partner and co-head of private equity at 3i.

Advisers
Vendor – Travers Smith, Edmund Reed (Legal).