A leading private equity firm investing in Europe

Pan-Asian restaurant chain

A leading private equity firm investing in Europe

Manufactures and distributes medical devices

A leading private equity firm investing in Europe

Plant hire business

A leading private equity firm investing in Europe

Pioneering UK value retailer

A leading private equity firm investing in Europe

Specialist provider of healthcare services

We invest in Western European mid-market companies

Duke Street Private Equity has been investing in mature, mid-market West European businesses for over twenty years, concentrating our investment strategy on four sectors: Consumer, Healthcare, Industrials & Engineering and Services. Typically we invest in companies with an enterprise value of between £50m - £250m. Our strategy is based on our ability to identify unique opportunities and add value to each business we acquire. We aim to transform the prospects of the companies that we invest in.

Origination beyond the obvious

We focus our efforts on transactions developed on an exclusive basis. We actively seek complex deals which other investors may avoid if we think they have underlying growth potential.

Value creation

Our mission is to accelerate the growth of the companies that we buy. We help our companies grow both organically and through acquisition.

Supportive Structure

We have developed a robust approach to building relationships between ourselves, the CEOs of our portfolio businesses and our Operating Partners.

Sector focus

We believe sector knowledge is critical, which is why we have dedicated teams focusing on our four core sectors. This, alongside the deep industry experience of our Operating Partners, has allowed us to create a proven track record of successfully building companies.

We invest in companies with strong brands serving consumers across multiple channels

We have extensive experience in the consumer sector: in restaurants with wagamama, in the gaming sector through our investment in companies such as Gala Bingo, Sporting Index and Leisure Link. In leisure, we have invested successfully in both niche hotel operators and fitness and leisure businesses. Two of our investments in particular – SandpiperCI and The Original Factory Shop – display our willingness to back retail management teams with ambitious growth plans, even at a time when the sector as a whole was experiencing tough trading.

We also have a wealth of experience of working with management teams in consumer branded products. At Simple, we backed an ambitious growth plan for the business to become the UK’s leading skin care provider by volume, overtaking companies such as Nivea and L’Oreal in the process.

See our Portfolio for a more in-depth analysis of these and further Consumer investments.

Duke Street is a long-term investor in the healthcare space, making our first investment in 1997

Since then we have deployed c. €700m in the sector, backing great management teams to deliver transformational business plans.

We believe the sector to be structurally attractive: it is defensive and benefits from significant barriers to entry due to the complexity of the products and services involved.

We also believe that it lends itself well to our investment strategy. Europe is home to a large number of strong management teams, and high value-added businesses which deliver outstanding patient outcomes. Such businesses typically offer multiple routes to value creation. Even the most mature sub-sectors remain fragmented and so there is significant potential for buy and build.

Please see our Portfolio for a more in-depth analysis of our past and present Healthcare investments.

We cover a broad range of Industrials sub-sectors with a particular focus on aerospace & defence, engineering, manufacturing & security

We look to invest in companies with differentiated product or process IP, operating in attractive end-markets, with scope to affect operational transformation through inter alia, a build-up in specific niches, technological changes, or product / geographic diversification.

We back management teams with a clear strategic vision as well as a strong operational focus; and our in-depth understanding of the sector means we are well-placed to work in partnership with such teams.

Our investments in this sector include Deloro Stellite, the specialist engineering group, and filtration solutions provider Madison Filter. See our Portfolio for a more in-depth analysis of these and further investments.

We invest in services businesses with the potential for operational improvement and rapid growth

The services sector encompasses a wide range of sub-sectors, each subject to its own dynamics but often with outsourcing as a key driver. We identify macro trends that will drive above average market growth, and then back businesses providing value added skills and products to their customers in those markets. We are particularly attracted where there is the potential for operational improvement as well as organic growth. We partner with best-in-class management teams providing support, capital and expertise where this is required and materially adds value.

We have considerable experience in the sector, complemented by a large network of industry contacts. Investments we have made in this sector include Ardent Hire Solutions, a heavy equipment hire business, Payzone, a consumer payments business, and the specialist pensions group Xafinity. See our Portfolio for a more in-depth analysis of these and further Services investments.

Our Portfolio

B&B Hotel

SECTOR: Consumer

Market-leading budget hotel chain

We set great store by our unique approach to originating deals. In the case of B&B Hotel, we had known the company for nearly 10 years and, despite the complexity of the deal, were able to identify the right management buy-in candidate to modernise the company and boost its growth potential. In two short years we were able to transform the company and put in place the building blocks for future growth.

Creating market leaders

European budget hotel operator Galaxie was the third largest hotel chain in France when we acquired it in July 2003. Headquartered in Brest and trading under the B&B Hotel brand, Galaxie had grown aggressively since it was founded in 1990. It owned and ran more than 100 hotels throughout France and eight in Germany, with a total of some 7,260 rooms, most of them in the one-star segment.

The dynamic nature of the budget hotel market in France and its relative fragmentation in Europe created the ideal conditions for Galaxie to develop itself as a European market leader. And it fell in line with our strategy to create leading players in the sectors in which we invest.

The deal

This was a complicated transaction. Not only did it involve twenty vendors, each with widely differing exit agendas. But our previous success of investing in the hotel sector and our prior knowledge of Galaxie meant we were able to secure exclusivity early on in the process.

And we stuck with it, working on the deal for 13 months until we were in a position to make a successful offer to all vendors. During that time we conducted extensive commercial due diligence on more than 100 sites and dealt with complex legal and tax issues linked to the nature of the business and its properties.

In order to accelerate the company’s growth plans, the management team was reinforced by Georges Sampeur, former Chief Executive Officer of Carlson WagonLit France.

The strategy

Galaxie’s performance improved dramatically following George Sampeur’s appointment. Part of this improvement was down to adapting the Group’s data processing platform for new distribution channels, such as the Internet, which led to a doubling of annual bookings.

In addition, we refinanced the company to the tune of €223 million in July 2004, replacing several lines of mortgage debt with a single mortgage facility that would finance the Group’s capital expenditure programme from 2005 to 2008.

We also sorted out the loss-making German operations and re-energised the pipeline of new hotel properties, which had been allowed to grow tired. Finally we implemented an aggressive growth strategy, and boosted the company’s capital expenditure programme.

Exit

The exit, a sale to Eurazeo in July 2005 was timed to take advantage of both the company’s excellent growth profile and a change in the taxation of French real estate assets.

Our Team

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Investors

Duke Street has invested £2.4bn and realized £3.7bn since 1994, and currently manages over £500m AUM. Our model ensures maximum alignment between investors and management teams and provides flexibility as well as certainty of funding. Fundraising is aligned with our own internal investment committee process, ensuring timely execution.



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Contact

Duke Street

Nations House,
103 Wigmore Street,
London W1U 1QS

Tel: +44 (0)20 7663 8500
Fax: +44 (0)20 7663 8501

Email us

mail@dukestreet.com

You can use the email address above, or write to us for additional security. Enquiries will of course be treated in strictest confidence from time of receipt but we cannot guarantee the security of email (or other) communications with us.