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Fosters once again wholly owned after 3i buy-out

Foster + Partners has bought out private equity group 3i’s shareholding in the company - a move which returns 100 per cent of the ownership back to the practice

The investment group snapped up a minority holding in the AJ100’s leading practice in 2007 ‘to help fund the group’s plans to grow internationally’.

The move, which comes just months after Foster + Partners wrote down the value of its company by £129.4million, sees every one of its partners become shareholders with the number of those owning shares increasing from ‘80 to all 140 partners’.

The practice will be led by a new partnership board headed by Norman Foster with Stefan Behling, Grant Brooker, Nigel Dancey, Spencer de Grey, Gerard Evenden, Luke Fox, David Nelson, Matthew Streets and David Summerfield. 

According to the company, the buy-back completes ‘the succession plan initiated in 2007’ and ‘reinforces design as the core value of the practice’.

Foster said his practice had ‘enjoyed an excellent relationship’ with 3i over the last seven years claiming the group had ‘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.’

He said: ‘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.’

Alan Giddins, managing partners and co-head of 3i added: ‘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.’

Reacting to the news, Hanif Kara of engineers AKT II said: ‘Given how much of UK PLC’s design output is seen across the world through the prism of this practice - fairly or unfairly - [this buy-back] is a relief. It can only be good for the generations to come.

‘Let’s applaud and congratulate them and the leaders.’

Earlier this year Foster & Partners Group saw it slash the ‘goodwill value’ on the company’s balance sheet from £279 million in April 2012 to £150 million at 30 April 2013.

In February the practice lost its chief executive Mouzhan Majidi, reportedly with a sizeable payoff, but is understood to be recruiting as it looks to double the size of its Shanghai team and open a new office in San Francisco.

Previous story (AJ 10.04.14)

Foster + Partners writes down value by £129m

The AJ100’s leading practice Foster + Partners has written down the value of its company by £129.4million, according to new figures posted at Companies House

The ‘paper loss’ reported by Foster & Partners Group saw it slash the ‘goodwill value’ on the company’s balance sheet from £279 million in April 2012 to £150 million at 30 April 2013.

The move means Norman Foster’s global practice has reduced its market value from £369million in 2012 to £244 million as at April last year.

According to its accounts, the huge write-down relates to the value of its subsidiary Foster Group (International) Limited - bought in 2007 - and the value of Piers Heath Associates Limited, which it snapped up three years ago.

The document reads: ‘[The] Group has recognised an impairment loss on goodwill of £129.4million due to the reduction of the recoverable amount based on a value in use calculation.

‘[This] calculation was prepared as a component of management’s discussions concerning a financial restructuring has adopted revised future operational cashflow predictions and achange to the applicable discount rate.’

The figures also show that Foster + Partners Group’s revenue fell 5 per cent from £161.5million in 2012 to £153million (see below). With the write-down and other ‘exceptional items’, including a £3 million charge related to the proposed financial restructure, the company posted a £142m pre-tax loss. Before the exceptional items, expenses and tax, the group reported a gross profit of £78million.

In February the practice lost its chief executive Mouzhan Majidi, reportedly with a sizeable payoff, but is understood to be recruting as it looks to double the size of its Shanghai team and open a new office in San Francisco.

Meanwhile the company has appointed Stuart Miners and Alan Giddins, both of venture capital outfit 3i Group which has stakes in the business, as new directors.

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