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

Esporta

SECTOR: Consumer

www.esporta.com

Leading operator of premium health and fitness clubs

Turning troubled businesses around can present real challenges. Getting the right management team in place and setting the strategic course for transformation early enough is crucial. Although market conditions became more competitive, we strengthened management and stuck with the company to create a solid business with a more loyal customer base, better profitability and a stronger balance sheet.

Structuring the deal

We created the Esporta Group by acquiring two premium tennis, health and fitness clubs in 2002 – Esporta and Invicta.

In the period leading up to the deal, Esporta plc had experienced problems which included two profits warnings, the departure of its CEO and a halving of its share price. With our backing, the company went on to become one of the leading health and fitness clubs in the UK.

First hostile take-private by a UK Private Equity firm

We had been tracking Esporta since it was listed on the London Stock Exchange in 2000. It then set out on an ambitious expansion programme which hit short-term profits growth unexpectedly hard, despite the company having first-class facilities in top locations.

The short-term problems that followed gave us the opportunity to build a sizeable stake in the company in the first place, and then to complete the first ever hostile take-private by a UK Private Equity firm.

Because we knew the industry well and could easily inspect the company’s assets we overcame the obstacles that usually prevent Private Equity firms from making hostile offers, including access to debt finance via strong relationships with our banking partners.

A stronger market position and more potential for growth

At the time of the deal, the enlarged group comprised 18 tennis clubs and 42 health and fitness clubs, with a further 13 scheduled to open before the end of 2003. Its 245,000 members make the group the UK’s second largest premium health and fitness operator.

In January 2004, we raised new debt facilities to finance the continued growth of Esporta's racquets club business to combat increasing competition in the sector. We also strengthened the management team to turn the business around focussing on measures to boost profits and customer retention.

The management team, led by CEO Neil Gillis and FD Michael Ball, drove an impressive turnaround of the business. Customer retention and profitability were improved and a loss-making overseas business was sold. Management also delivered an exciting pipeline of new site opening opportunities which helped attract a wide range of interest from potential buyers.

Exit

In February 2007, Esporta was sold to the Halabi family trust. At the time of the sale, Esporta exhibited market-leading performance, with profitability and key customer KPIs well above the industry average.

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.