3i to make a 1.8x return on the sale of its minority stake in Foster + Partners

30 Jun 2014

3i Group plc (“3i) today announces the sale of its minority stake in Foster + Partners (“the Company”), the world-renowned architectural practice. This transaction completes the Company’s transition of the ownership of the business to a long-term partnership model.

3i has today received cash proceeds of £70 million which, together with loan repayments received to date, represents aggregate cash proceeds of £108 million. In addition, 3i will receive deferred consideration of £40 million plus interest. This represents a money multiple of 1.8x on 3i’s original investment and a small premium to the valuation at 31 March 2014. 

3i invested in Foster + Partners in 2007 to support the Company’s growth through diversification by geography and service, as well as enable its transition to a partnership model. Since our investment, the Company has almost doubled its sales in the US, which now accounts for 27% of billings. It has also tripled its activity in Asia, where billings have grown from 8% in 2007 to 27% today, with particularly strong growth coming from China. 

During this time, Foster + Partners’ core architecture offering has been enhanced by the addition of an environmental consultancy practice, the expansion of its engineering business, the launch of its interior design business and its ongoing investment in research and new technologies to drive innovation in its design work. 

As well as its ground-breaking work in architecture, design and sustainability which has won it 245 awards since 2007 and resulted in the Company being voted “Most admired Practice” by BD World Architecture for the last seven years, 3i has worked with the Company to refine its strategy and enhance the effectiveness of its operations in order to provide a strong platform for is ongoing growth and development. 

During our investment period, Foster + Partners has won over 700 projects across 60  countries, including Apple’s headquarters in the US; new airports in Jordan, Kuwait, Qatar and Panama; Bloomberg’s headquarters in London; 425 Park Avenue tower, New York, the first new building on Park Avenue for 50 years; and the Global Financial Centre in Shanghai’s Bund district. Today, Foster + Partners has a record £290m order book and is well positioned for future growth, with an enhanced geographic footprint and service offering. 

Alan Giddins, Managing Partner and co-Head of Private Equity, commented: 
“We are proud to have participated in the transition of Foster + Partners’ ownership to a long-term partnership model, as well as supported the Company’s growth, geographic expansion and service diversification. Foster + Partners has built a strong platform and has an unrivalled global brand in its sector. We are confident the Company will continue to thrive and maintain its world-leading position in design and architectural services.” 

Lord Foster, Chairman and Founder of Foster + Partners commented
“We have enjoyed an excellent relationship with 3i over the last seven years. They have helped us on a number of fronts including strategy, investment in research, governance, planning, accessing new markets and bringing best practice to the way we manage our business.  The practice is more international, offers a greater diversity of services and is more exciting than ever before. Today we look forward to continuing to build on our success, but now as a company that is fully owned by its partners and which keeps design excellence at the forefront of everything we do”

For further information, contact:

3i Group plc
Kathryn van der Kroft
Tel: +44 20 7975 3021
Email: kathryn.vanderkroft@3i.com

Notes to editors:

About 3i Group
3i is a leading international investment manager focused on mid-market Private Equity, Infrastructure and Debt Management across Europe, North America and Asia. For further information, please visit: www.3i.com

About Foster + Partners
Foster + Partners is one of the most innovative architecture and design practices in the world. Over the past four decades the practice has pioneered integrated, sustainable design solutions through a strikingly wide range of work, from urban masterplans, public infrastructure, airports, civic and cultural buildings, offices and workplaces to private houses and product design. Based in London, with studios worldwide, the practice has an international reach, with buildings on six continents. Since its inception in 1967 it has received more than 650 awards for excellence and won over 130 national and international competitions.

Regulatory information
This transaction involved an investment recommendation of 3i Investments plc.