The annual league table of Britain’s 100 private equity-backed companies with the fastest growing profits has just been released. The Sunday Times Deloitte Buyout Track 100 shows the combined profits of the 100 companies exceeded 1.4 billion, together they employ nearly 85,000 staff, and nearly half (48%) of the companies have profits of more than 10 million.
The number one spot is taken by Foster + Partners, the London-based architectural consultancy responsible for the Swiss Re Tower – popularly known as the Gherkin. 3i invested an undisclosed sum for a minority stake to fund the company’s rapid expansion in May 2007. It has driven profit growth of 147% a year from 8 million in 2006 to 49.2 million in 2008.
Notable brands that did not make the top ten include noodle bar operator Wagamama, backed by Lion Capital; travel website operator The Trainline, backed by Exponent; and yacht builder Sunseeker International, backed by Bank of Scotland Corporate.
More than a quarter (26) of the companies were bought by private equity houses in 2008. 27 were bought out the previous year. 40 of the companies are the result of primary deals, and another eight arose from public-to-private transactions. The other 52 companies are the result of secondary (43) and tertiary (nine) deals, according to the research firm Fast Track who collected the data.
Nearly a third (30) of the 100 companies are headquartered in London and another fifth are in the Midlands (20). The remainder breaks down as follows: Southeast (19) Northeast (13), Northwest (8), Scotland (5), Wales (2), East (2) and Southwest (1).
Travel, hospitality and leisure was the biggest sector on the league table, accounting for 17 firms. These include well-known consumer brands, such as restaurant operator Yo! Sushi (ranked 61) which has grown profits 43% a year to 4 million in 2007. The telecoms, media and technology sector is well represented with a total of 14 companies on the table. These two sectors are more dominant than they were last year, whereas there are just 14 consumer companies (including retailers) on the table compared to 19 last year.
“This research highlights some of the success private equity-backed businesses are achieving in Britain,” says Mark Pacitti, partner in corporate finance at Deloitte, the title sponsor of the league table. “Despite the difficult market, private equity investors remain strong supporters of local business and we wouldn’t expect this to change in 2009.”
With September 2008 being the latest financial year end from which audited figures are featured, the Buyout 100 mainly measures performance in the months leading up to the credit crunch.
D.C.